Time: Sun Jul 27 09:17:52 1997
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Date: Sun, 27 Jul 1997 08:46:00 -0700
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: First Lady's Aide Solicited Check to DNC (fwd)

>First Lady's Aide Solicited Check to DNC, Donor Says
>Fund-raising: Administration denies account by Torrance businessman Johnny
Chung, who gave $50,000 contribution to Hillary Clinton's chief of staff. 
>By WILLIAM C. REMPEL, ALAN C. MILLER, Times Staff Writers
>	Contradicting accounts by the Clinton administration, one of the
Democratic Party's biggest campaign donors says he gave a $50,000 check to
the first lady's chief of staff on White House grounds in 1995 in direct
response to solicitations by aides of Hillary Rodham Clinton. 
>      Southern California entrepreneur Johnny Chien Chuen Chung said he
was seeking VIP treatment for a delegation of visiting Chinese businessmen
when he was asked to help the first lady defray the cost of White House
Christmas receptions billed to the Democratic National Committee. 
>      Chung, who has refused to cooperate with investigators unless
granted immunity from prosecution, told The Times during interviews that he
realized such special treatment hinged on his willingness to make a
political contribution. 
>      "I see the White House is like a subway: You have to put in coins to
open the gates," Chung said in his first public comments on the
controversial episode. 
>      On Friday, White House Communications Director Ann Lewis disputed
Chung's account. She said of the first lady's aides: "At no time did they
solicit a contribution from Mr. Chung." 
>      Lewis also denied that the $50,000 check had anything to do with the
White House perquisites extended to the Torrance businessman and the
Chinese delegation. She said the first lady's aides may have gotten Chung
and his guests into lunch at the White House mess hall and arranged a photo
with Hillary Clinton but that any such efforts on his behalf were "a
courtesy we could do and have done for friends." 
>      Chung's story may compound political embarrassment for the White
House and raise serious legal questions, including whether Hillary
Clinton's closest aides violated the Hatch Act prohibiting federal
employees from soliciting contributions, particularly in a government
>      And it poses new headaches for Margaret Williams, the first lady's
former chief of staff, who has acknowledged accepting Chung's check.  The
Times has learned that she is the subject of a pending inquiry by the
federal agency charged with enforcing the Hatch Act as well as scrutiny by
congressional panels probing campaign finance abuses. 
>      "The main point is that you're not supposed to use your government
clout to raise money," former White House Counsel Abner J. Mikva said in
reference to restrictions on fund-raising by federal employees. 
>      Chung's detailed version of White House events, combined with other
newly available information, challenges the president's insistence that
Williams played "a completely passive" role in relaying an unsolicited
$50,000 check to the DNC. 
>      Williams, who recently left the White House, and Evan Ryan, an aide
in the first lady's office who met with Chung and the Chinese delegation,
declined to be interviewed. 
>      In recent interviews, Chung, 43, also denied Republican allegations
that he may have funneled Chinese government money to the DNC.  GOP
senators raised the issue in connection with the recent disclosure that
$150,000 was transferred from Chinese beer makers via the Bank of China to
Chung's California bank account three days before his $50,000 donation. 
>      A partial review of Chung's personal financial records shows that
contrary to GOP assertions, Chung had in excess of $300,000 in various bank
accounts at the time, indicating that he could have covered his $50,000
contribution without Chinese funds. 
>      Chung emphasized that the transferred $150,000 was earmarked for
creation of two companies to launch a business venture with the Beijing
brewers, who had nothing to do with the March 1995 donation and Washington
>      Chung also was critical of former DNC Finance Director Richard
Sullivan, who told a Senate hearing this month that he had qualms about the
origins of the March 1995 donation. Sullivan, he said, was never reluctant
to take his money before the fund-raising controversy erupted last fall. 
>      "Most of my contributions were solicited by Sullivan and the DNC,"
Chung said, noting that just one month after the $50,000 donation, he gave
Sullivan another $125,000 at a Hollywood fund-raiser with the president. "I
hand my checks personally to Richard Sullivan. He never says he [was]
worried about my money. Never." 
>      Chung's visit to Washington in March 1995 did raise some concerns in
the Clinton administration. A National Security Council aide later
described him in a memo as "a hustler" trying to exploit his contacts at
the White House. 
>      But this did not stop Chung from being admitted. Records show about
20 of his 49 visits to the White House occurred after the warning. 
>      Chung, a Taiwan-born fax company owner-turned-international
businessman, contributed $366,000 between mid-1994 and last November's
election. He said Sullivan was in frequent contact, advising him of
upcoming fund-raising events and even visiting his Torrance office.
>      The DNC recently returned all of Chung's donations because it said
an internal audit could not confirm that the money actually came from the
businessman. Chung and his attorneys have long insisted that the donations
were funded from Chung's financial reserves and that he represented no
foreign interests. 
>      "They call Johnny a hustler and there's no question he was hustling
the DNC, the White House and anybody else who could help him," said Chung's
Santa Monica attorney, Brian Sun. "But he was hustling business. He had
absolutely no political agenda. 
>      "Johnny Chung's not promoting the policy interests of some foreign
government; he's promoting Johnny Chung," he said. "That's not a crime.
It's the American way." 
>      Chung Escorts Chinese Delegation to Capitol By March 1995, Johnny
Chung's growing involvement in politics was earning him a reputation in
Asian business circles. He squired the Chinese beer maker to a Clinton
Christmas party in 1994. Then, Chung said, Zheng Hongye, chairman of the
China Chamber of International Commerce, asked him to open the same doors
for a delegation of major executives he was leading on a U.S. visit. 
>       "I am trying to build new business in China, so I am happy to do my
best to help," said Chung, who touted the delegation as "very important and
very powerful leaders" in a letter to the White House. 
>       When he escorted the five-member delegation to Washington, his
first stop was DNC headquarters. There, on Wednesday, March 8, 1995, DNC
Chairman Donald L. Fowler welcomed them and posed for pictures with an arm
around Chung's shoulder. 
>       But Chung had come with an ambitious wish list: a White House tour,
a meeting with Hillary Clinton, lunch in the White House mess and admission
to the taping of President Clinton's Saturday morning radio address. And
none of it was arranged. "I was on the limb," Chung said. 
>       After Sullivan said the party could do little for him, Chung said
he offered to make another contribution to the DNC without specifying an
>       "I did not wave around a check," Chung said. "That is not my style.
>That is not a businessman's style." 
>       Sullivan testified before the Senate Governmental Affairs Committee
this month that Chung had offered to donate $50,000 if he could get his
Chinese associates into the presidential radio address. He said he turned
Chung down because this was inappropriate and, moreover, "I had a sense
that he might be taking money from them . . . and then giving it to us." 
>       Federal election law prohibits the acceptance of foreign
>Sullivan's attorney, Robert F. Bauer, said the former DNC official's
concern about Chung was limited to this episode. 
>       "As to Johnny's other activities, Richard's general recollection
was that the DNC accepted his bona fides, knew he was an American citizen,
knew that he had a recognized business in Los Angeles," Bauer said.  "His
contributions were considered lawful. . . ." 
>       DNC officials only agreed to arrange a standard White House  tour.
>Dissatisfied, Chung headed for the White House alone. He was admitted, and
found his way to Room 100 of the Old Executive Office Building--the first
lady's office. 
>       Chung felt he had a special relationship with Hillary Clinton
because he says he had wrangled a meeting with her years earlier at the
governor's mansion in Little Rock, Ark., while touting his new fax service
to state officials. 
>       Since then, he has been photographed with her on about a dozen
occasions, from the White House to the U.S. Embassy in Beijing. One of the
earliest fund-raising events showed Chung and his family with the Clintons
at the president's 48th birthday party. A few months later, he contributed
$40,000 to attend a luncheon featuring Hillary Clinton in Los Angeles. 
>       And in the first lady's office that March day, according to Chung,
he found another opportunity to be generous. Here is Chung's version of
those disputed events: 
>	Chung was greeted by Ryan, who was then a staff assistant. He showed her
the business cards of his Chinese companions and asked if arrangements
could be made for them to eat lunch in the White House mess and meet
Hillary Clinton. Chung also asked if there was anything he could do to help
the White House. 
>       Ryan left for about 15 to 20 minutes and returned, saying she had
spoken with Williams. Then, she said: "Maybe you can help us." 
>       The aide told Chung that "the first lady had some debts with the
DNC" from expenses associated with White House Christmas parties.  Chung
believes that Ryan mentioned a figure of around $80,000. (The Times could
not confirm such an expense specifically charged to Hillary Clinton. But
DNC spokesman Steve Langdon said the DNC does pick up the tab on a number
of White House holiday parties, amounting to a total of $300,000 to
$400,000 a year.) 
>       Ryan told him, Chung said, that she was relaying the request on
behalf of Williams, who hoped Chung could "help the first lady" defray
those costs. 
>"Then a light bulb goes on in my mind. I start to understand," Chung said.
"I said I will help for $50,000." 
>       After making that commitment, Chung said, he left the White House
confident that his wish list would be substantially fulfilled. The next
morning, Chung said, he went back to the White House and was escorted to
Ryan's desk in the reception area of the first lady's office. He said he
gave her an unsealed envelope. 
>       According to Chung, Ryan lifted the flap and examined the contents.
 Inside was his check and a note to Williams, which he recalled said
something like: "To Maggie--I do my best to help. Johnny Chung." A short
time later, Chung said, the chief of staff joined them and Ryan handed the
envelope to her. Williams, he said, immediately led him into her private
office and called to reserve a table for the Chinese delegation at the
White House mess. 
>       Williams has since told congressional investigators that she never
looked at the check. Chung said there was no need for her to look inside
the envelope. "I know she knew what was inside, because to me it was her
idea that I help," he said. 
>       Before the delegation convened for lunch around a table of red,
white and blue linens in the White House mess, Chung was advised that
another wish list item had come true. The first lady could see them before
addressing a teachers' group that afternoon.  "Maggie set up everything,"
Chung said. 
>Later, waiting for Hillary Clinton in a White House reception room,Chung
said he asked if the first lady had been informed of his donation and Ryan
responded, "Yes, she definitely knows." 
>        Shortly before 4 p.m. the Chinese businessmen stood for the
arrival of Hillary Clinton. And there, in front of the delegation Chung was
bent on impressing, he said the first lady declared: "Welcome to the White
House, my good friend." White House Denies It Violated the Hatch Act White
House officials confirm that Chung came to the first lady's office on March
8 and 9, 1995. They have acknowledged that Williams was given a check for
$50,000 from Chung in the White House and that Chung was seeking admission
to the president's radio address. And they say Williams may have arranged
the lunch and the photo with Hillary Clinton. 
>        But they agree with little else from Chung's version of events.
They maintain that Williams and Ryan did not solicit the donation and did
not provide any benefits as a result of it. "Maggie Williams recalls that,
on several occasions, Johnny Chung told her that he wanted to make a
personal contribution to the Clintons," Lewis said. "She told him that he
could not make a personal contribution.  She eventually told him he could
give to other entities, such as the Democratic National Committee." 
>        Lewis said Chung was told the first lady's office could not
arrange his attendance at the president's radio address. And, Lewis said,
Ryan "is sure that she had no discussion of financial contributions with
Johnny Chung." 
>The Hatch Act prohibits a federal employee from "knowingly soliciting,
accepting or receiving a political contribution from any person" and
soliciting or collecting a donation "in any building occupied by a federal
employee in the discharge of official duties." 
>        The White House maintains that Williams "absolutely did not"
violate the law by taking Chung's check because regulations allow a
government official to accept a political contribution as long as it is
forwarded immediately to a political party. Chung's account, if true, could
constitute evidence of improper fund-raising, said attorneys familiar with
election law. "This information implicates the first lady's chief of staff
in activity that she knew, or should have known, was fund-raising at the
White House, and that may be illegal," said Jan Baran, an expert on
campaign finance law and a former Republican National Committee general
>        Louis Vega, a spokesman for the Office of Special Counsel, which
investigates alleged Hatch Act violations, said the agency had opened "a
general inquiry regarding Maggie Williams" and campaign fund-raising
earlier this year. He declined to provide any details, including whether
the inquiry concerned the $50,000 contribution from Chung. 
>        Violation of the Hatch Act can result in employment-related
penalties, ranging from a warning letter to dismissal. The probe, Vega
said, is on hold at the request of the Justice Department to avoid impeding
an ongoing criminal investigation. He said that generally means the Justice
Department inquiry involves the same subject or witnesses. The Justice
Department declined to comment on whether Williams is under scrutiny by its
task force investigating fund-raising allegations. 
>         Williams, who has served Hillary Clinton for the past four years,
has recently married and plans to move to France. Chung's Entourage Meets
the President March 9, 1995, had been a costly but very successful day for
Chung and his entourage: A White House tour, lunch in the executive mansion
and a photo op with the first lady. Was the delegation impressed? "They
were very happy, but they say to me, 'Do you think we can see the
president?' " Chung recalled. He determined to press again for entre to
Clinton's Saturday radio address. 
>         On Friday, Chung returned to the White House, was admitted into
the compound by the first lady's office, and repeated his request to Ryan.
He put in more calls to the DNC. One call went to Carol Khare, assistant to
DNC Chairman Fowler.  Chung told her he was a friend of the first lady and
wanted to take this important delegation of Chinese executives to the radio
address. Khare said she would look into it. 
>         That phone call is believed to be her first encounter with Chung.
She later complained to colleagues that Chung became a nuisance, always
asking for favors. "He doesn't take 'no' very easily," she told
acquaintances. "He's like a bulldog; if he wants something he keeps chewing
on it until he gets it." 
>On the eve of the radio address, Chung got what he wanted, with the DNC's
>         Less clear is whether the $50,000 helped pave the way. Chung
believes that he told Khare about his gift, but the former DNC official
told others she only recalls his claim of friendship with Hillary Clinton.
That Saturday, after the president addressed the nation on radio, he posed
for pictures in his office with the Chinese delegation. Afterward, he
expressed concern about who they were and whether they had been screened to
prevent embarrassment if the photos were released. 
>         Clinton's uneasiness prompted a review by NSC officials who
delayed giving the photos to Chung for a time. It was that reassessment
that produced the memo calling the entrepreneur a hustler. Chung is not
offended by the label. It is, he believes, an attribute of aggressive
American business people. What bothers him, he says, are accusations
questioning his patriotism. "I am American citizen," Chung said. "My
shareholders are [mostly]American citizens. I am all-American businessman." 
>         He has spent heavily on political campaigns, he said, to assure
the kind of access that makes him appear to be "a big man in America" to
prospective clients overseas. Despite his promotional efforts, Chung's deal
with the Chinese beer maker collapsed after a top-level management
reorganization in Beijing.  And Chung said no new business resulted from
the delegation visit in 1995. The Democratic Party, meanwhile, hasn't
forgotten Johnny Chung. Barely a month ago, according to attorney Sun--even
as the DNC
>was returning all of his donations--Chung received an invitation to join
Clinton and Vice President Al Gore for a Broadway fund-raiser in New York. 
>This time, Chung declined. 
>posted by Citizens for Honest Government, Obtaining free information about
Citizens for Honest Government is simple. 
>Call Toll-Free 1-800-251-8089
>Visit CFHG on the web at: 
>Copyright 1997 Los Angeles Times
>Rempel reported from Los Angeles and Miller from Washington.Times staff
writer Ronald J. Ostrow and researcher Janet Lundblad in Washington
contributed to this story. 

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

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