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Date: Fri, 25 Jul 1997 13:57:18 -0700
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: Immunity for 5 Shafts Justice Department (fwd)

>Arkansas Democrat-Gazette
>July 24, 1997
>Immunity for 5 defies Justice Department
>WASHINGTON -- Senate Democrats rebuffed President Clinton's Justice
>Department team and agreed Wednesday to extend immunity to five campaign
>fund-raising witnesses, including a hostess for former Little Rock
>restaurateur Charlie Trie.
>    In lopsided votes, Democrats and Republicans endorsed providing legal
>protection to Trie aide Keshi Zahn and four Buddhist nuns involved in a
>California fund-raiser last year attended by Vice President Gore. Justice
>Department lawyers objected to the move, saying it could endanger their
>criminal investigation.
>    The development came as Democrats on the Senate Governmental Affairs
>Committee got their first chance to quiz Republicans about the GOP's ties
>to big-money donations from overseas. Democrats opened the third week of
>campaign-finance hearings by mapping out how a wealthy Hong Kong
>businessman wired money through a Florida subsidiary to help Republicans.
>    After months of scrutiny on Democratic donations tied to foreign
>sources, committee Democrats examined a $2.1 million loan guarantee made
>by Hong Kong's Young Brothers Development Corp. to the National Policy
>Forum, a Republican think tank. The deal, made in the closing weeks of the
>1994 election campaign, allowed the forum to repay a $1.6 million loan to
>the Republican National Committee.
>    Alan Baron, special counsel for committee Democrats, said the events
>illustrated that Republicans share some of the same Democratic
>fund-raising problems that the committee explored earlier this month.
>    "It's a bipartisan problem,'' Baron said.
>    Republicans countered by saying the party, at the time, thought the
>Young Brothers' money originated in the United States. They denied any
>effort to funnel foreign money into GOP campaign treasuries.
>    The deal with Young Brothers, controlled by Ambrose Young, evolved
>after pleas from Haley Barbour, then-GOP party chairman who founded the
>policy forum. Democrats presented evidence Wednesday about Barbour's
>activities in anticipation of his committee testimony, which may occur
>    Before diving into complex Republican fund-raising questions
>Wednesday, the committee ended weeks of deadlock and agreed to give
>immunity to Zahn and the four Buddhist nuns. 
>    Granting immunity requires a two-thirds majority in committee, meaning
>all nine Republicans and at least two of the seven Democrats would have to
>support the measure. In the end, a majority of Democrats favored immunity
>despite some reservations about trampling on the Justice Department's
>criminal investigation.
>    The committee voted 13-3 in favor of immunity for Zahn, a Virginia
>woman who helped Trie run his international trading business in
>Washington. Opposing immunity were three Democrats: Sen. Joseph Lieberman
>of Connecticut, Sen. Daniel Akaka of Hawaii and Sen. Richard Durbin of
>    The senators and Democratic aides said they opposed Zahn's immunity
>for several reasons, including indications that she is a bigger player in
>the case than the four nuns.
>    "She seemed to be more crucial to the Justice Department's case,'' one
>Democratic aide said.
>    Investigators want to talk to Zahn about several events involving
>Trie, who left Little Rock to become a Democratic fund-raiser. Party
>leaders have returned much of the money because of concerns that it
>originated overseas.
>    Like Trie, Zahn has been in China in recent weeks. While Trie has said
>he has no plans to leave, committee aides said Zahn apparently wants to
>return to the United States and tell her story under immunity.
>    Zahn worked as a part-time hostess for Trie. She came under scrutiny
>after she made a $12,500 donation to Democrats -- more than half her
>$22,000 annual salary as a clerical worker in Virginia's Arlington County
>    In a related development, Secretary of State Madeleine Albright has
>asked Chinese leaders to help congressional investigators locate Trie. In
>a letter to Rep. Gerald Solomon, R-N.Y., the State Department said the
>matter is "a high priority in which Secretary Albright is personally
>    The committee also agreed in a 15-1 vote to extend immunity to the
>four nuns who attended a 1996 fund-raiser with Gore at a California
>Buddhist temple. The lone dissenting vote came from Lieberman, who
>insisted the committee could move its investigation forward through other
>avenues besides immunity.
>    "We will be able to make the basic case here with the resources
>available,'' he said.
>    Sen. Robert Torricelli, D-N.J., said he hoped the committee's vote
>would send a "message'' to the Justice Department that it needs to
>cooperate better with the committee. The two groups are conducting
>separate investigations in fund-raising abuses, which Durbin said creates
>an "impossible situation.''
>    Durbin said senators will have to rely on their own judgments rather
>than the Justice Department in future immunity questions.
>    The Democratic concerns followed Tuesday's rebuke by committee
>Chairman Fred Thompson, R-Tenn., who said the Clinton-run Justice
>Department's stance appeared to be colored by politics.
>    After Wednesday's vote, Thompson gave Democrats their first chance to
>call Republican witnesses to discuss money flowing from Young Brothers and
>several GOP-related groups.
>    Democrats spent most of a day-long hearing examining the policy forum,
>which Barbour created in 1993 as a free-standing think tank with close
>ties to the Republican National Committee. The next year, Barbour urged
>Young to guarantee a $2.1 million bank loan to help run the policy forum.
>    Young agreed and wired $2.1 million from his Hong Kong company to a
>Florida subsidiary, Young Brothers USA, which guaranteed the loan. The
>policy forum obtained the bank loan and, in turn, passed along $1.6
>million to pay off the debt to the Republican National Committee.
>    Democrats introduced a letter from Young indicating that Barbour
>"expressed to me'' the loan "is urgently needed and directly related to
>the November election.''
>    Under election law, foreigners cannot donate to political groups, but
>can donate to nonpolitical entities such as the National Policy Forum.
>Democrats wondered if Barbour deliberately skirted federal election laws
>in the Young Brothers deal to help Republicans in the 1994 elections.
>    "Money moved in from Hong Kong, it rocketed into an account and
>rocketed out to the RNC,'' Baron said.
>    Barbour has denied any wrongdoing. Ed Gillespie, a Republican
>spokesman, said at the time that party leaders thought the transaction
>involved "American funds through an American corporation.''
>    Democrats insisted that the money helped bankroll a late Republican
>push in the closing weeks of the 1994 election, which led to GOP control
>of Congress for the first time in four decades.
>    "What political entity ever turned down $1.6 million a couple weeks
>before an election?'' Baron asked.
>    Republicans disputed the suggestion, saying the debt repayment for the
>Republican National Committee went into an account that could only be used
>for state campaigns and not federal races for Congress.
>    "The RNC had sufficient funds to carry out its election plans and did
>not in any way modify its expenditures,'' the party said in a statement.
>    Baron said the money still could have been used for general
>party-building and "get-out-the-vote'' activities in 15 states that helped
>Republican congressional candidates. None of the money apparently went to
>Arkansas, committee documents indicated.
>    Ultimately, Young's attorney Benton Becker testified, the Young
>Brothers ended up losing $800,000 in the deal. Despite Barbour's
>assurances to Young that Republicans would "make good'' on any loan, the
>policy forum ultimately defaulted on the loan, leading the bank to seize
>several certificates of deposit that Young put up as collateral.
>    Becker said he hoped the Republican National Committee eventually
>would ante up the rest of the money.
>    "It would be my hope that the RNC would give consideration to that,''
>Becker said..
>This article was published on Thursday, July 24, 1997
>Copyright 1997, Little Rock Newspapers, Inc. All rights reserved. 
>This document cannot be reprinted without the express written permission
>of Little Rock Newspapers, Inc. 
>-> Send "subscribe   snetnews " to majordomo@world.std.com
>->  Posted by: kalliste@aci.net (J. Orlin Grabbe)

Paul Andrew Mitchell                 : Counselor at Law, federal witness
B.A., Political Science, UCLA;  M.S., Public Administration, U.C. Irvine

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