THE STATE OF THE HEARINGS -- WEEK TWO July 18, 1997 Transcript

The Online Explainers take your question on the investigation. The NewsHour's coverage of the Congressional Investigation. The inside stories on the political fight behind the public investigation. The investigation is big news in Washington, but how's it playing around the country. A closer look at the issues really under scrutiny by the Congress.

A RealAudio version of of this segment is available. KWAME HOLMAN: As the first congressional panel to investigate alleged fund-raising abuses in the last election, the Senate Governmental Affairs Committee was the center of the political universe on its opening day, July 8th. Perhaps appropriately, Committee Chairman Fred Thompson began with a bombshell. SEN. FRED THOMPSON, Chairman, Governmental Affairs Committee: The committee believes that high-level Chinese government officials crafted a plan to increase China's influence over the U.S. political process. The committee has identified specific steps taken in furtherance of the plan. Implementation of the plan has been handled by Chinese government officials and individuals enlisted to assist in the effort. KWAME HOLMAN: But the committee's ranking Democrat, John Glenn, immediately signaled the committee's work might be viewed through a partisan prism, saying FBI briefings on Chinese influence were far from conclusive. SEN. JOHN GLENN, (D) Ohio: I've heard language like infiltration, foreign spies, foreigners, as we're jeopardizing our national security. Well, on this issue the committee should go just as far as the facts take us, recognizing that it's the FBI that's in a much better position to--than a congressional committee--to do an espionage investigation. KWAME HOLMAN: The central figure in the hearings thus far is 52-year-old John Huang, who was born in China and raised in Taiwan. Huang was a Democratic Party contributor in the early 1990's, while an executive in California for the Indonesia-based Lippo Group. In 1994, Huang went to work for the Commerce Department, then was hired by the Democratic National Committee at the urging of senior administration officials and the President, himself. There, Huang raised $3.4 million for the 1996 campaign. Almost half that money was returned by the DNC because of questions about its origin. Committee Republicans suggest Huang, while at Commerce, may have shared classified information with the financial and construction conglomerate Lippo, which is heavily involved in joint ventures with the government of China. The committee's first witness last week was a fund-raiser who worked at the DNC with Huang. RICHARD SULLIVAN, Former DNC Finance Director: (July 10) If I had--let me tell you--if I had had any inclination that John Huang would raise foreign money, I would have personally walked him to the elevator and walked him out of the building. KWAME HOLMAN: But this week brought the hearing's first hard evidence of an illegal foreign campaign contribution. Juliana Utomo, who worked with Huang at a Lippo Group subsidiary in California, testified Huang sought and received reimbursement for a $50,000 DNC donation he made in 1992. SEN. JOSEPH LIEBERMAN, (D) Connecticut: There's a pretty clear document here requesting a reimbursement for a $50,000 donation to the DNC Victory Fund, which certainly looks like the movement of foreign money into an American campaign in 1992. JULIANA UTOMO: If I may add, actually the DNC exactly meant--I didn't know until recently. SEN. JOSEPH LIEBERMAN: Could you say that again? The DNC--I didn't hear the second word. SPOKESMAN: She didn't know what the DNC stood for until recently. SEN. JOSEPH LIEBERMAN: Oh, didn't know what it was. This was literally a blank check that you signed. I mean, who asked you to sign the check? JULIANA UTOMO: I cannot remember. SEN. JOSEPH LIEBERMAN: You don't know--well, who might have-- JULIANA UTOMO: But usually Mr. Agustian or Mr. Huang. KWAME HOLMAN: On Wednesday, Former Commerce Undersecretary Jeffrey Garten was asked what he meant when he testified he ordered then Commerce Administrative Assistant Huang walled off from matters pertaining to China. JEFFREY GARTEN, Former Commerce Undersecretary: (Wednesday) We could only entrust a certain number of people, and Mr. Huang didn't make the cut. A lot of people didn't make the cut. I don't want to say he was the only one who didn't. Most of the people didn't make the cut. KWAME HOLMAN: But Committee Republicans noted despite such instructions, Huang at Commerce received classified briefings from CIA officials on China, visited the Chinese embassy, and temporarily kept possession of a dozen intelligence reports. SEN. ARLEN SPECTER, (R) Pennsylvania: And obviously you don't know what he did with those 12 finished intelligence reports, which he had in his possession at that time? JOHN DICKERSON, CIA: He had a need to know, and he had a certified safe for storage of those classified documents. My assumption is that he kept them there, and that he used them properly. I have no reason to believe otherwise. I'm assuming that he used the information properly and that he kept them locked up in the safe. SEN. ARLEN SPECTER: Well, then I repeat my question. You had no way of knowing whether he-- JOHN DICKERSON: But I had no way of knowing. SEN. ARLEN SPECTER: --did that or not. JOHN DICKERSON: I have no way of knowing, no. KWAME HOLMAN: Yesterday, Republicans suggested one thing Huang might have done with classified material is to take it across the street from the Commerce Department to a spare office at an investment firm, where Huang frequently used the telephone and received packages. SPOKESPERSON: Was there any particular individual who used the spare office the most frequently? PAULA GREENE, Former Office Manager: (Thursday) Yes. John Huang would use it the most. KWAME HOLMAN: Later in the day yesterday, Democrats became exasperated with the Republican staff lawyer as he laid out a lengthy record of John Huang's phone calls, messages, and other contacts. A sharp partisan exchange ensued. SEN. ROBERT TORRICELLI, (D) New Jersey: I am somewhat confused by your presence, though grateful for your testimony. I, nevertheless, believe that the charts have been misleading, and we are, as I have suggested, I believe we are doing a disservice to a serious inquiry by attempting to overstate the case, misrepresent facts, and continuing to place ourselves in a prosecutorial or a defense mode. SEN. BOB SMITH, (R) New Hampshire: I want to compliment you, Mr. Cobb, because you took a lot of abuse here and you kept your composure and your dignity. Terms such as "dishonesty" and "misrepresentation" were used directly at you. I think it's uncalled for. It doesn't take a lot of courage--with all due respect to some on the other side--for a Senator to sit here and beat up on a staff person who has to maintain that dignity and respect. KWAME HOLMAN: The committee adjourned yesterday to take up such matters of how to encourage the testimony of reluctant witnesses who, like John Huang, have declined thus far to appear. JIM LEHRER: Margaret Warner takes it from there. MARGARET WARNER: With me are two reporters who've been at the hearings each day: Marc Lacey of the Los Angeles Times and James Barnes of the National Journal. Mark, if you had to sum it up after two weeks, what is the fundamental premise that the Republicans are trying to develop here? MARC LACEY, Los Angeles Times: The Republicans believe that a great deal of foreign money went into the DNC during the last campaign. They also believe that John Huang may have been--been in a position to pass classified information to his former bosses at Lippo, which has ties to the Chinese government, so Senator Thompson, the Republicans, are--they believe that the Chinese government may have been involved in a grand plan to try to influence U.S. elections. And that's basically the-- MARGARET WARNER: And why is John Huang--I mean, of all the people who raised money for the DNC in '96, why is John Huang so central to this inquiry? JAMES BARNES, National Journal: Well, for starters, Richard Sullivan this week said that one of the reasons-- MARGARET WARNER: The DNC fund-raising-- JAMES BARNES: The DNC fund-raising director said this week that one of the reasons why Huang's role as fund-raiser was downgraded slightly was because of concern over the appearance of having foreign nationals at fund-raisers that Huang had organized. And, of course, it's Huang's longstanding ties with both the Lippo Group, being a former executive of that company, and that company, of course, now has a lot of business dealings in--with the People's Republic of China. MARGARET WARNER: But, I mean, is Huang's--were more of his contributions had to be returned--does he stand out among all fund-raisers? MARC LACEY: Even before the hearings opened, we knew that 1.6 million dollars of money that John Huang raised was returned. So he--more money has been returned from John Huang than any other DNC fund-raiser. MARGARET WARNER: Okay. So what has emerged in the testimony? What's actually been said about his fund-raising activities that get to this premise? What do you think is most significant? MARC LACEY: Well, there is one instance where the committee showed very clearly that some money that John Huang was involved in arranging clearly came from Indonesia and went into the Democratic National Committee, and how this happened was an enterprise called Hip Hing Holdings. That's a subsidiary of Lippo, where Huang used to work. They gave some money to the DNC, $50,000 in 1992. Then John Huang sent a memo to Indonesia, to the Lippo headquarters there, asking for reimbursement for that money. So it seems that that is a clear-cut case of reimbursement of money so the money can be tied from Indonesia to Los Angeles, where Hip Hing is based and right from the DNC. MARGARET WARNER: Where he was still working then. MARC LACEY: Right. Exactly. MARGARET WARNER: Has there been any other testimony that established either a definite or a possible foreign connection to money he arised? JAMES BARNES: Yes. We had testimony this week that showed that when two contributors--two other contributors that Huang had brought in to contribute to the Democratic Party--Chinese-American entrepreneur Johnny Chung and Jogish Gandhi that after they had--around the time that they were taking their contributions to the DNC--they were receiving large transfers of money from overseas banks, one the Bank of China, and the other CitiBank in Tokyo, and so that's also raised some questions. MARGARET WARNER: Now, what about on the other front, or the other part of the premise, which has to do with whether John Huang was passing information back to either Lippo or Chinese-connected--government-connected entities, what has specifically been said or testified to this week that gets to that? JAMES BARNES: Well, nothing really specific, but there is some--was a lot of rich detail this week about the opportunity that John Huang may have had to pass along information. We got detailed records of a number of phone calls that he made while he was a Commerce Department official to the Lippo Bank in California, 237. A lot of Republicans thought that's more than just picking up your old messages. We also discovered that during his lunch hour he would occasionally walk across the street to an Arkansas firm, Stevens Group, which also has ties to Lippo. He would use that office. He would receive packages there. He would receive and make--and use the fax machine there. So that strongly suggested to the Republicans, at least, that here he had the opportunity to pass on information that he might not have wanted to have done while he was actually sitting in his office at the Commerce Department. MARGARET WARNER: That, of course, raises the question of what information was he privy to. We saw in Kwame's tape that--the CIA guy behind the screen testifying--I assume you all couldn't see his face--but what did he say about what was the nature of these briefings? I mean, what is the kind of information that Lippo or the Chinese government would be interested in? MARC LACEY: These--first of all, this was top secret information that John Dickerson, a CIA agent, passed along to John Huang, when he was Deputy Assistant Secretary at Commerce. We don't know exactly what he passed along, but Sen. Specter in his questioning did elicit some information. The sort of information that he was briefing Huang on was economic information in Asia, in China, in particular, in Vietnam, Hong Kong, business opportunities, the sorts of things Republicans say that the Lippo Group might be interested in. MARGARET WARNER: Now, how have the Democrats countered all of this? JAMES BARNES: Well, one of the things that they've countered is simply by saying this is old news, we've heard parts of these charges in newspaper accounts that have been coming out really since before the last election. And the other thing that they have raised is that there's still no hard connection that any money--that any information went to the Lippo Group or to the government of China. That was something that the intelligence people said in open session; that there was no evidence that intelligence assets had been compromised, that sort of thing. And also, there's really no evidence--hard evidence--that money from the government of China actually got into the President's reelection campaign. MARGARET WARNER: Now, of course, as you mentioned earlier, they're also trying to establish that John Huang didn't just act alone. What specifically has been said or testified to about what DNC officials knew about the nature of his fund-raising and their involvement in it? MARC LACEY: Okay. He was--at the DNC he was a fund-raiser. MARGARET WARNER: We should say January '96 he goes to the DNC. MARC LACEY: Exactly. MARGARET WARNER: Leave Commerce, goes to the DNC. MARC LACEY: Exactly. Richard Sullivan, the opening witness, said that--in the tape there--if he had any idea that John Huang was raising overseas money, he would have walked him to the elevator, taken him out. There isn't any evidence that John Huang was raising foreign money and that DNC officials were winking and nodding and they knew about it. There hasn't been firm evidence of that. We don't really have much information there. MARGARET WARNER: Are there--does it paint the opposite picture of him as a loose cannon? JAMES BARNES: Well, not entirely. I mean, it's pretty clear that he was working in coordination with the--with his superiors. I think there was also some evidence that came out this week that suggested that officials at the DNC may have taken--may have been taken an askance of--not looked the right way--concerning another contributor, controversial contributor, Roger Tamraz, an oil financier. Sullivan had received a memorandum from a National Security Adviser to the Vice President saying Tamraz is a shady operator; we shouldn't have anything to do with him. And yet, even after Sullivan got that memo, share dit with his superiors at the DNC like Marvin Rosen and Don Fowler, the chairman, Tamraz was still invited to fund-raisers with the President and, indeed, on one--in one of these fund-raisers he talked to the President about getting some U.S. backing for an oil pipeline that he's trying to build in Armenia. MARGARET WARNER: And finally what is ahead for next week? MARC LACEY: Okay. Next week is going to be quite interesting because we're going to turn to the Republican Party and the Democrats are going to look at wrongdoing in the Democratic Party. MARGARET WARNER: They get to lay out their-- MARC LACEY: Exactly. So tomorrow, Haley Barbour, the former Chairman of the RNC, is going to be deposed by the Democrats and the Republican attorney, and he's expected to testify next week. MARGARET WARNER: There's also some lingering immunity issues. JAMES BARNES: We're going to have a vote--the committee is going to hear from Justice Department officials as to why they oppose granting immunity to some Asian monks, who were involved in the fund-raiser out there with the Vice President, and then we'll probably have a vote on that by the committee on Tuesday. And if these monks get immunity, the Republicans think that they are going to provide an awful lot of powerful information about how John Huang laundered money through a fund-raiser. MARGARET WARNER: Well, great. Thank you both very much. Mark, Jim, thanks.

REGIONS TOPICS RECENT PROGRAMS ABOUT US FEEDBACK SUBSCRIPTIONS / FEEDS:

Support the kind of journalism done by the NewsHour...Become a member of your local PBS station.
PBS Online Privacy Policy Copyright ©1996- MacNeil/Lehrer Productions. All Rights Reserved.