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FRONTLINE Show #1511
Air date: April 14, 1997
Produced by Michael Kirk and Kenneth Levis
Directed by Michael Kirk
Correspondent Peter J. Boyer
Written by Michael Kirk and Peter J. Boyer
NARRATOR: January, 1997. Bill Clinton has led his
party to the first reelection of a Democratic president since FDR. His triumph was shadowed by a gathering scandal. Since November the White House has been besieged by stories of questionable campaign contributions and has been in full damage control. It had taken a lot of dollars to get elected and the money fever in our national politics had given rise to a new political class: people who saw politics not as a marketplace of ideas, but just as a marketplace. Many of them were here this night with the president, sharing his victory. We're interested in just two of them. We call them "The Fixers."
Some of the other fixers have been spending a lot of time lately on the front page, a circumstance they'd generally rather avoid. The story has focused on the president, vice president and the Asia connection. Lord knows that's getting its share of attention. What we set out to do is try to examine a case study in getting connected. Just how do fixers go about donating their way into the highest circles of power? We heard about a couple who mastered the art of getting connected. Their unlikely odyssey brought them from obscurity to the White House in the space of two years and made them millionaires along the way.
Their story begins in Hawaii. Honolulu, Hawaii-- America's paradise outpost in the pacific, a paradise that was put up for sale in the 1980s when Japanese developers invaded the islands. The flood of money promised enormous profit for those who could navigate the political shoals. My first stop was a public interest lawyer who tried to slow the development frenzy.
ANTHONY LOCRICCHIO, Public Interest Attorney: In the mid-'80s Hawaii, for all intents and purposes, became a yen colony of Japan. You had a period where a limousine would drive into a neighborhood and a Japanese investor would knock on the door and say, "I want to buy your house." The person would say, "It's not for sale." They would say, "Here is the price we'll give you" and the guy would call to his wife, "Martha, we're moving."
NARRATOR: But not all Japanese purchases were so straightforward. Some required the cooperation of willing politicians.
ANTHONY LOCRICCHIO: The political influence over the governor's office, major political entities, was monumental. Huge amounts of political contributions came in. And the remarkable thing for the Japanese was how cheaply they could buy Hawaiian politicians.
NARRATOR: The campaign contribution free-for-all got so out of control that finally the Federal Elections Commission stepped in. The federal investigators found more than 100 violations of campaign laws meant to protect against foreign influence over our elections. The Honolulu mayor, Frank Fazi, had accepted tens of thousands of dollars, as had the governor, John Wahiee, all of it improperly given and received. Altogether, hundreds of thousands of dollars to 111 politicians and their campaigns were ruled illegal and
had to be given back.
Playing a key role behind the scenes in those
Hawaiian fund-raising controversies were Gene and Nora Lum. Nora was a Japanese-American who started out selling clothes in a tourist shop on Waikiki. Gene was an ethnic Chinese, a lawyer who tried and failed at politics. But together they found their way when they learned the uses of political fund-raising. Gene had landed a staff job on the city council advising on land use policy. Nora was helping find projects for developers. And when the Japanese created the Hawaiian land rush of the 1980s, Gene and Nora Lum were ready.
DONNA WONG, Kailua Neighborhood Board: This is the era of the Asians. There's a great influx of Asians and Asian-Americans and Nora sought opportunities and she knew opportunities when she saw them and she just happens to be Asian. Now, how convenient. Both of them do, you know? "So let us show you how we can help you."
NARRATOR: Using teamwork, they put investors together with the political people who had to say yes to a project.
ANTHONY LOCRICCHIO: They were able to give the appearance-- "I'd like you to meet my wife, who has these political contributions," "I'd like you to meet my husband, who works for the key guy in the legislature."
NARRATOR: I needed to talk to someone who had done one of these deals with the Lums. [at hotel] Mr. Charles Chidiac, please.
Charles Chidiac is a financier with a checkered
past, an unindicted co- conspirator in the BNL banking scandal. He wanted to build Hawaii's most fabulous golf resort, the Hawaiian Riviera.
CHARLES CHIDIAC: I was told that this woman and her husband can fix anything in Hawaii, so I hired her to advise me how to work in
this corrupt system and help me out with my zoning. I needed to get the zoning. I mean, I had the
engineering ready, I had the money read and everything ready and this thing was dragging on and on and on. She is a convincing woman. She can convince people that she can do things. So I gave her $50,000 in cash and she said "I'll get you the approval in two months." And she said-- she told me she's going to pay several guys-- some of the, you know, power people in the state, and she'll get it to me in two months.
INTERVIEWER: Do you believe that she did pay those people?
CHARLES CHIDIAC: I have no way of checking. She told me she did. She didn't only work for me, by the way. She worked for other people also.
NARRATOR: Among Nora and Gene's clients were other developers who were trying to build hotels, resorts and golf courses. By the end of the 1980s, 73 Japanese-owned golf courses were in various stages of development.
ANTHONY LOCRICCHIO: In Hawaii golf courses were prohibited on agricultural land. Overnight that law changed. Japanese dollars were able to change the law and to get the constitution ignored. Golf courses were suddenly permitted on agricultural land.
NARRATOR: Take the case of the Manowili Valley. In Hawaii they say it's a scenic treasure. In the mid-'80s 1,000 acres of the valley were sold for $7 mil lion in order to build two golf courses financed by the Japanese. To overcome political barriers, the
developer hired Gene Lum. Then the developer beg an to make donations to Hawaiian politicians.
ANTHONY LOCRICCHIO: After they were able to buy the vote change, then overnight that land became worth $40 million to $50 million dollars.
NARRATOR: The valley had been home to native Hawaiian farmers for generations. Now Jenny Olinger, who lived here for 60 years, had to leave. Then one day the bulldozers arrived. Developers hired off-duty police and moved in on the local residents.
ANTHONY LOCRICCHIO: Houses were bulldozed down. The bulk of the farmers were forced to leave by false police evictions, threats. SWAT teams moved little old ladies and children, with full governmental support. There was a complete breakdown in law enforcement because the police and government authorities were on the payroll of these excellent Japanese businesspeople, thanks, to a large extent, to Gene and Nora Lum.
NARRATOR: As she left, Jenny Olinger placed an ancient Hawaiian curse on the golf course and those associated with it.
ANTHONY LOCRICCHIO: They actually built a golf course on the side of a mountain.
NARRATOR: Meanwhile, the FBI had launched an island-wide investigation into political corruption. A law enforcement official who was in Hawaii at the time confirmed the investigation, but would not be publicly identified. An actor speaks his words.
In the case of the Lums, there was a genuine
ACTOR: That's true. There were two issues-- a search warrant for the Lums' house and a subpoena for the financial records.
NARRATOR: What the agents were looking for was
evidence of political kickbacks.
And essentially what needed to be established was the fact of payments to these people?
ACTOR: Right. Their sole reason for existence is to
pay kickbacks and launder money.
NARRATOR: Undercover FBI agents met with Hawaii's fixers, including Nora Lum, and secretly recorded their conversations. Nora Lum apparently actually bragged of her ability, her expertise in laundering campaign funds.
ACTOR: Yes. As a matter of fact, that's right.
BOYER: And how would that work?
ACTOR: Well, I remember he had two or three conversations, one with her and one with Gene out on a golf course.
NARRATOR: The probe of the Lums even included their associate, the developer Charles Chidiac, who secretly became a cooperating witness for the FBI. The case was not prosecuted for what a Justice Department official said was a lack of admissible evidence. But the Lums were reaching for higher political connections.
CHARLES CHIDIAC: She said, "I'm going to move into the hierarchy of the Democratic Party" and she was going to move to the mainland and work national politics.
NARRATOR: The most direct way to move onto the
national stage in 1992 was to get noticed by this
man-- Ron Brown, chairman of the Democratic National Committee. A few days after meeting him in Honolulu the Lums donated $26,000 to the party. Then that summer the Lums kicked in another $40,000. Nora's daughter, Maxine, gave $7,500. Her other daughter, Trisha, gave $7,500. Nora herself gave $10,000 and her sister, Kathy Nojima, gave. $15,000. And then they went to the Democratic convention.
The Lums and many Asian-American contributors placed their bets at just the moment the money chase in presidential politics was reaching a frenzy--with Bill Clinton as the candidate and Ron Brown as chief fund-raiser.
RON BROWN: My mother and my father always taught me to believe that in America, a kid from Harlem can go anywhere, do anything, even become chairman of the greatest party in the history of democracy.
NARRATOR: To make the climb from Harlem to this
podium, Ron Brown had perfected the character traits of a super-fixer. In a 25-year career as a lawyer-lobbyist among the power elite, he'd become a master at connections. He'd worked for Senator Edward Kennedy, ran Jesse Jackson's presidential campaign and, as the first black chairman of the Democratic National Committee, Brown was determined to deliver the next president of the United States. To do that the Democrats needed money.
Brown concentrated on bringing new money and new people into the Democratic Party. That meant tapping into the new heart of Asian America-- Los Angeles.
RONALD WAKABYASHI, L.A. County Official: In the 80s the Republican National Committee was being very successful in tapping into Asian money and I think Ron Brown and the Democrats recognized that, that there was fertile ground to be tilled.
DAVID LANG, Democratic Consultant: You know, we know how to make money. A lot of us are businessmen, right, and a lot of them are very successful entrepreneurs.
NARRATOR: And many Asian-Americans welcomed the attentions of this head of a national party who was himself a minority.
RONALD WAKABYASHI: He was comfortable in that environment and took the time to really engage people. I mean, he's looking at you and followed through on a conversation. I think the things that struck most people were that-- that you would hear later on about follow-up, that there'd be a conversation in those environments where he would say, "I'll look into that" or "I'll get back to you on that," and he actually did.
NARRATOR: But Brown would soon learn that dealing with the fragmented Asian-American community was a challenge.
DAVID LANG: When we talk about the Asian community, it's not just one community. It's different communities that are very divided. There's the Koreans, the Japanese, the Filipinos, the Cambodians, you name it. And even within each ethnic groups, you know, there are different factions. You know, you look at yourselves as different from, you know, people who come from another area.
NARRATOR: Brown realized he needed someone from the outside to step in and unify the diverse community.
RONALD WAKABYASHI: So to pull off something Asian, you know, that someone from outside in many ways provides the neutrality that allows for people from these ethnic communities to convene.
NARRATOR: And that's how Gene and Nora moved to the next stop on their odyssey to the White House. With Brown's blessing they set themselves up as Clinton-Gore fundraisers.
CHARLES CHIDIAC: What the Lums told me is that they are now in a big way with Ron Brown and the Democratic Party and, basically, that she was part of the Ron Brown setup. She convinced Ron Brown that she's an expert and that she knew all the tricks of raising money for campaigns. And since he's been interested in money, I think that's why he hired her. And she was happy to do it.
NARRATOR: And why were the Lums so eager to get close to Ron Brown?
CHARLES CHIDIAC: She told me that when Bill Clinton wins, Ron Brown is going to become the Secretary of Commerce because that's how they 're going to make money.
NARRATOR: The Lums created something called the Asia Pacific Advisory Council -- APAC -- which they said was part of the Democratic National Committee. People who saw APAC in action said it was like no political organization they had ever seen.
RONALD WAKABYASHI: You know, it wasn't a major operation. It didn't do much precinct walking. It didn't do much targeting likely voters. It's not-- it wasn't that. If you measure it on that account, it
makes no sense at all.
DAVID LANG: I don't, you know, recall seeing them at any, you know, local Asian-American candidate's fundraiser. I don't recall seeing them having any close relationship with any Asian-American elected officials.
RONALD WAKABYASHI: The offices-- you have to imagine a large warehouse in an area that is really not a residential area, it's warehouses. And it's-- the front part of this warehouse has got some partitioning and carpeting and phone lines, but the physical plant wasn't much.
CHARLES CHIDIAC: She said, "It's only to register
voters." I was there for two and a half months in that office and that office was purely to raise money.
NARRATOR: The Lums' friend and business associate from Hawaii, Charles Chidiac, joined them at APAC as a volunteer. The trouble was, he wasn't an Asian. So Nora created the Lebanese-American Advisory Council. The Lums' foray into national fund-raising culminated with a ceremony shortly before the election.
RONALD WAKABYASHI: It was an awards program. You know, I was an awardee and the awards were, like, you know, 31 flavors. One person out of each community was identified to get the award.
NARRATOR: Wakabayashi represented Japanese-Americans. There was a Korean-American, a Pacific Islander. There's Charles Chidiac. There's Nora herself. Melinda Yee, Ron Brown's emissary to the Asian community, and then there's this man, John Huang, there from the start of the Lums' operation and soon to become the central figure in the Democratic fund-raising troubles. In a letter bearing his signature, candidate Bill Clinton said the event would honor those affiliated with the Lums' group for their hard work on behalf of the campaign.
RONALD WAKABYASHI: The awards were kind of neat. There was a plaque with a rock that was from Little Rock. You know, it was an interesting kind of rock. And we had some formations and some things in it.
NARRATOR: The event seemed a success, but it was hard to judge because no one seemed to know just how much money it raised.
RONALD WAKABYASHI: I think that was either a $50 or $100 a ticket kind of event. So I just multiplied that by the crowd size that I saw and that's how I estimated what was made in that event.
INTERVIEWER: And what was the number?
RONALD WAKABYASHI: I guess that the amount was around $10,000.
NARRATOR: Estimates from others who were there range from $25,000 to several times that, but the Lums apparently kept the information to themselves and the DNC has no record of the event. For that matter, the DNC has no record of any money raised by APAC during that campaign. That doesn't surprise Charles Chidiac.
CHARLES CHIDIAC, Real Estate Developer: They had the back room in the place. She had a big checkbook on her desk. She wouldn't talk to anybody in the back. She always came to the front. That was her secret operation, she and her husband, and only her daughter could go in. One time she showed me $50,000 and I saw stacks of $100 bills. She had, like, a shopping, paper bag. She showed me the money.
NARRATOR: According to Chidiac, a lot of the APAC
money came from council member John Huang.
CHARLES CHIDIAC: John Huang-- he used to come every day to the APAC office. She introduced him to me as a guy who donated $350,000 to the campaign. This is in '92. They learned all the techniques in '92. And she told me that. in total, you know the end of the campaign, she told me that this office raised $700,000. But the money disappeared though. Nobody knows what happened to the money.
NARRATOR: No-one knows, Chidiac or anyone else.
However much money they raised and whomever it came from, the Lums did their part and Ron Brown did his. Bill Clinton was elected president of the United States.
Pres. BILL CLINTON: As secretary of commerce I am nominating someone who will make the Commerce Department a powerhouse, Ron Brown. With Ron Brown as secretary of commerce_
NARRATOR: Ron Brown received his reward: secretary of commerce.
Pres. BILL CLINTON: Today is also a special day
for me because Mac McLarty is standing beside me, as he has since we were children in kindergarten.
NARRATOR: Thomas "Mac" McLarty became President Clinton's chief of staff. He was a genuine "friend of Bill." But in his life as a businessman there was a potential problem developing, a possible embarrassment. The problem was in Oklahoma. His company, Arkla, had made a fortune in the oil and gas business. As things would turn out, the gas business in Oklahoma is where were about to find the Lums. But we're getting ahead of the story. It starts back with the oil and gas boom of the 1980s
BOB ANTHONY: The boom in the early '80s was unbelievable. There were rig workers who would come in and lay down $100 bills and buy big chunk gold wrist watches like we had never seen before. There was a frenzy mentality.
RONALD MILLER, V.P. Gage Corporation: It was like watching "Dallas," the television show, except taking place in Oklahoma. Limousines were around a lot. Corporate jets were in vogue. The real affluents used to fly Bell Jeff Ranger helicopters to go out for dinner.
BOB ANTHONY, Oklahoma Corporation Commissioner: The prices were so high, they would be getting, instead of $10 or $20 or $100 an acre, thousands of dollars an acre for oil and gas leases.
NARRATOR: But then the gas business went bust and one tiny gas company out here was especially up against it. The Gage Corporation was caught in a nasty life-and-death legal dispute with Oklahoma's dominant utility and Gage's only customer, the giant Oklahoma Natural Gas.
RON MILLER: Out of the blue they just called us up and said, "Shut your pipeline down." It was a gut shot because it potentially was a death blow.
NARRATOR: So Gage hauled ONG before Oklahoma's utility regulator, the Corporations Commission.
RON MILLER: Every time we would make an appearance, to me it was sort of obvious that the rulings that we were getting were_ were bizarre. And I went to our attorneys, McAfee, Taft, and told them that I thought that there was some hanky-panky going on.
BOB ANTHONY: I knew of the history of corruption in Oklahoma government. I had no idea that within the first few weeks of my taking office in this agency, that utility lawyers, utility lobbyists, utility executives would come into my office, close the door and count out thousands of dollars in hundred dollar bills. There was a utility lawyer who actually represented three of the five biggest utilities in the state and his business is to get things done at the Corporate Commission. And I was elected Commissioner and he wanted to establish a relationship. And I guess his pattern of doing that was to provide money. I can remember the first time he actually came into my office, he even said, "You know, sometimes I get money for the Commissioners." He called it "walking around
money." He said, "I can get your $300 or $400 walking around money. I do that for the Commissioners." That was kind of a shocking thing.
NARRATOR: His friends called William Anderson "Tater." For 30 years he represented all the big utilities, including Mac McLarty's company, Arkla. Commissioner Anthony decided to keep a secret from "Tater." He had told the FBI about the "walking around money" and they had decided to bug his office.
1st VOICE: There's 50 $100 bills there.
2nd VOICE: Okay.
1st VOICE: Now, I'll be back in here Friday or
Monday with the rest of it, okay?
2nd VOICE: You said 50 $100 bills?
1st VOICE: Yeah.
BOB ANTHONY: Mr. Anderson walked in with a wad of $100 bills and I counted them out for the benefit of the FBI's tape recorder and counted them up to 50.
1st VOICE: I wish there was one more and I'd grab it.
2nd VOICE: That's $5,000.
BOB ANTHONY: After money changed hands, I'd look the person in the eye and say, "You and I both know this is illegal." Sometimes I would quote the Oklahoma Statute Title XVII, Section 177.
2nd VOICE: _the Oklahoma Statue Title XVII is sort of interfering with this.
1st VOICE: The law makes hypocrites out of all of
us. That damn statute does.
BOB ANTHONY: And Mr. Anderson, would say, "That law makes hypocrites out of all of us." In the next sentence he mentioned that the Arkla representative would be in on Friday to make arrangements for some more.
NARRATOR: Arkla was Mac McLarty's gas company.
BOB ANTHONY: The efforts to buy influence were the greatest when it comes to Arkla. Mr. Anderson would bring me money. The senior vice president would be there a week or two later and the president and chief operating officer of Arkla, Milt Honay, was a source of $500. He became chairman of the board and chief executive officer of Arkla after Mac McLarty went to become chief of staff at the White House.
NARRATOR: For nearly four years, Commissioner Anthony secretly taped the transactions. Ron Miller wondered why Gage continued to lose before the Corporations Commission.
RON MILLER: We kept trying to get some justice and it was ruling upon ruling upon ruling. But then our attorneys received a phone call from the Corporate Commission requesting that they come up to the Commission the next morning and bring their clients with them.
NARRATOR: At the Jim Thorpe building in Oklahoma City, Commissioner Anthony had a little surprise. He was about to tell his secret in an open hearing.
RON MILLER: So we appeared up at the Corporate
Commission at 9:00 o'clock the next morning and there were television cameras and there was a room full of people.
BOB ANTHONY: Lots of people knew there was something big going on. The courtroom was full and it was full of the parties to these cases and their lawyers, wondering just how much I knew and how much I was going to say.
RON MILLER: Commissioner Anthony came out and basically read a statement.
BOB ANTHONY: On several occasions I have received thousands of dollars in cash, which I immediately gave to the FBI as evidence in their
investigation. In cases where cash was received, a
utility attorney, a utility lobbyist and/or a utility officer was involved.
RON MILLER: It was a shock, but it was an exhilarating thrill of realizing that we had-- had basically been right in what we had assumed.
NARRATOR: For the first time Miller thought he might have some leverage in his fight with ONG. He sued Tater Anderson in the hope that the fear of a very public trail and further embarrassment for ONG and for McLarty's Arkla might force a settlement in the dispute.
BOB ANTHONY: And having these lawyers issuing
subpoenas and doing depositions and putting witnesses on the stand and getting testimony under oath, all heck would have broke loose because we're not just talking about Gage Systems and ONG and a gas purchase contract. We're talking about a 30-year history of bribery and corruption and wrongdoing in the state of Oklahoma. And_ and there's a lot of people that just couldn't afford to have any of that story told.
NARRATOR: The cost of Ron Miller's legal fight nearly drove his company to ruin.
RON MILLER: We'd been fighting the equivalent of the Second World War and it cost us a lot of money. And at some point in time, you finally just say, "I've had enough. I want out."
NARRATOR: And then something unexpected happened. Ron Miller's partner, Jim Kitchens, called about a mysterious message.
RON MILLER: He said that he had a phone call from a friend that had overheard a conversation in California at a DNC fundraiser and that he had heard Gage mentioned and it was this friend's understanding that Jim was going to get a phone call and Jim was passing that story on to me.
INTERVIEWER: Where in California?
RON MILLER: I think he said it was in Torrence.
NARRATOR: The problem in Oklahoma had a political dimension and the only thing that would make it go away was if Ron Miller would go away. And what would accomplish that? A buyout of Miller's Gage Corporation, a deal in which all sides made out. ONG made just such a deal possible when it agreed to offer a lucrative gas contract to a potential buyer of Gage. Of course, the offer was contingent on Gage dropping its lawsuit.
BOB ANTHONY: This was damage control. The Gage
Corporation had somebody by the throat and Mac McLarty had a motive and an interest in seeing that these lawsuits and the discovery and the public disclosure go away.
NARRATOR: And, in act, just as Mac McLarty was being appointed President Clinton's chief of staff, the mystery buyers began negotiating the purchase of Gage with Miller's partner.
RON MILLER: When I would ask who these meetings were with, he said that it was a woman. That was what my ex-partner said. And then he said that it's a woman and her husband is a lawyer and that they work for the DNC. But I didn't know the name or know anything about it. And any time that he would discuss it with me, it would be "the lady" or "the woman." I mean, that was how he referred to it. I finally was given the name,
Nora and Gene Lum. They were very close friends and very involved with Ron Brown.
NARRATOR: The Lums knew little about Oklahoma. They had no expertise about pipelines and the closest they'd been to the oil and gas business was their local filling station.
RON MILLER: I got a phone call saying that they were flying in town and that they would meet me at our office at 1:00 o'clock in the morning. She was very friendly to me, cordial and congenial. Her husband was a little bit more withdrawn. She did a lot of the talking.
BOB ANTHONY: I don't think you have to be too smart to know that Nora Lum didn't wonder into Oklahoma just coincidentally, after having served as the executive director of the APAC organization that collected all those Asian Pacific campaign contributions. I think somebody at an awfully high level had the connections to get something done that they needed to get done.
NARRATOR: The Lums called their new gas company Dynamic Energy Resources. Commissioner Anthony believed it was all a political fix.
BOB ANTHONY: Dynamic Energy Resources was a startup company that had no experience in the natural gas business. They had no reserves and they end up getting a contract to sell enormous volumes of natural gas that they don't have over a 10-year period of time. And their biggest claim to fame seems to be their political connections.
RON MILLER: When they started coming over to the office, practically the first thing that would come out of their mouth is, "We're from Washington and we're here to help." I mean, it was_ it was a bizarre thing.
NARRATOR: The Lums delighted in their political
connections. To close the deal they hired a lawyer,
but it wasn't just any lawyer, it was this man, John
Tisdale, President Clinton's own lawyer.
RON MILLER: My secretary came to me and said, "Ron, we're getting faxes from the White House." Tisdale would be over there grabbing them off the fax machine.
BOB ANTHONY: And John Tisdale represented Dynamic at the closing. So from my standpoint as a little old Oklahoma utility regulator is, "What's going on here?"
NARRATOR: Here's what was going on. In buying Gage, the Lums got a very sweet deal. They got a 10-year gas contract worth millions of dollars, part of which they were able to pre-sell. They used that money to buy the company. Then they sold the rest of the contract. So after paying Miller and his partner nearly $6.5 million, their gas company had no gas contract, but it did have a $12 million pile of cash. Now the Lums were bona fide Oklahoma millionaires.
The time had come to talk to Nora Lum.
VOICE ON PHONE: Good morning. Dynamic Energy.
PETER BOYER: Mrs. Nora Lum, please.
VOICE ON PHONE: She's not here right now. Do you want me to take a message?
PETER BOYER: Yes, ma'am. This is Peter Boyer. I'm in Tulsa and I would dearly love to speak with her. Is Mr. Lum in?
VOICE ON PHONE: No, he's not. I'm the answering service.
PETER BOYER: Okay. If you'd be kind enough, same message to Mr. Lum.
VOICE ON PHONE: Okay, I will give this message to them.
PETER BOYER: Thank you.
NARRATOR: But Nora and Gene proved elusive, even at home:
ANSWERING MACHINE: Sorry to miss your call. Please leave your name, number and a message and I'll get back to you as soon as possible. And thanks for calling.
PETER BOYER: Good morning, Mrs. Lum. This is Peter Boyer.
NARRATOR: So I continued to track the Lums through documents and those who knew them. The Lums first major act as majority shareholders of Dynamic Energy was to hire Michael Brown, whose father was now President Clinton's secretary of commerce. Like the Lums , the younger Brown had no experience in the oil and gas business.
BOB ANTHONY: Nora Lum, from her 70 percent interest, for which she paid nothing, which was worth 70 percent of $10 million-- Nora Lum gave 5 percentage points of her 70 to Michael Brown, the son of the commerce secretary. And that was done to buy influence with the commerce secretary's office. But the cross-pollenization with the U.S. Commerce Department doesn't stop there.
NARRATOR: The Lums also reached out to Clinton White House staffer and Ron Brown senior aide Melinda Yee, who they befriended back at APAC in Los Angeles. They placed Yee's mother, Helen, on Dynamic's board of directors, giving her an ownership stake and a $14,500 dividend. Mrs. Yee also had no previous experience in the oil and gas business.
Yee was proving hard to get on camera. I tried convincing her lawyer to let her talk. I was told that I was pressuring Melinda and she didn't like being pressured. Apparently, she wanted no part of a story about the Lums. In the end, Yee would not comment.
It was becoming the standard response. Maybe at least the Lums lawyer, John Tisdale, would go on the record with us. He would not go on camera, he told me, and neither would the Lums. But for the record he offered what amounted to a blanket denial. Nora denied making political payoffs in Hawaii and said she had never claimed to be able to launder campaign money. And in California, she says, there was never any bag with $50,0 00 in cash and she had no knowledge of John Huang donating $350,000. As for Oklahoma, she says she
was not part of any grand plan to help Mac McLarty and the reason she hired Michael Brown was because she and Gene thought of him as the son they never had. But the Oklahoma interlude was a profitable one for the Lums.
BOB ANTHONY: Nora Lum fronted a transaction that benefited Mac McLarty and helped him deal with the skeletons in his closet and it was worth a whole lot of money to somebody. Now, she was giving it away to people associated with the Commerce Department, but she had plenty left over for herself. She's still quite a player, I understand, at some of the big-deal events. We'll see.
NARRATOR: The odyssey of Gene and Nora Lum carried them to Washington, D.C.. No longer were they simply a pair of mysterious fundraisers from Hawaii. Now they were Oklahoma millionaires. They had a business card identifying them as executives in the gas industry. In Washington, especially in the heat of the "Asian connection" scandals, the Lums' closest connections are no more eager to be drawn into their unfolding saga than were people who knew them in any of the other locales. The Lums had gotten close to some connected people in Washington, people who wanted no part of their story now.
PETER BOYER: [on the phone] --litigation and
criminal proceedings and Congressional hearings.
We're not_ I'm not_ my purpose isn't to ask for
particulars about, "Did you make telephone calls to
John Huang or the Commerce Department?" I don't_ I couldn't care less about that.
NARRATOR: But if Washington does anything well it creates paper and the Lums left a paper trail through this city. It begins here in the Old Executive Office Building, where the Clinton administration has set aside information about contributors. In a small room on the fourth floor there are files for all the headline-grabbing names: John Huang-- he was the banker who was a member of APAC; Charlie Trieh, the Little Rock Chinese restaurant owner; Johnny Chung, who handed $50,000 to Hillary Clinton's aide next door in the West Wing. There are lists of the 938 people who slept in the Lincoln Bedroom. Some of them paid hundreds of thousands of dollars for the privilege. And of course there are the Lums.
Using her new connections to the inner circle Nora visited White House offices more than a dozen times. Nora's friend, Melinda Yee, was posted to the office of White House personnel and Gene was highly recommended for a job in international trade or transportation. Their daughter, Trisha, was hired. She landed close to Ron Brown over at the Commerce Department. That's where John Huang
also got a job, as did Melinda Yee and more than a
dozen of Brown's assistants from the DNC.
In a special room deep inside the labyrinth of the Commerce Department the paper trail continues. Once again, our familiar cast of characters-- John Huang, Melinda Yee and, of course, Lums. Much of this material was released after a lawsuit filed by public interest attorney Larry Klayman.
LARRY KLAYMAN: Judicial Watch: Given the fact that the Lums participated in trade-related activities with the Department of Commerce, given the fact that Mrs. Lum's daughter, Trisha Lum, worked at the Department of Commerce, given the fact that Melinda Yee's mother is reported to have owned stock in Dynamic Energy, given the fact that Melinda Yee herself was a high official at the Commerce Department, the facts add up to the
Lums trying to buy influence with Secretary Ron Brown and the Clinton Administration.
NARRATOR: The Lums deny the charge, but they had plenty of reason to stay close to Ron Brown. He was a new sort of Commerce chief, aggressively using his department to help American companies looking for international deals. His trade missions were business trips that resulted in billions of dollars worth of deals and seats on those planes were highly coveted prizes, fiercely sought. Brown once told FRONTLINE why.
RON BROWN: [November 21, 1995] When the secretary of commerce gets off an airplane, the airplane has emblazoned on it the words "the United States of America," and I walk down the tarmac accompanied by 25 or 30 chief executive officers of American companies large and small, that reverberates throughout that country and, yes, it makes a difference and, yes, it has an impact and, yes, it helps create economic growth and, yes, it helps create jobs in the United States and I'm very proud of that record.
NARRATOR: Perhaps no trade mission was more widely coveted than the trip to China and 25 business leaders made the list.
LARRY KLAYMAN, Judicial Watch: Nora Lum actually was scheduled to go on one of these trips. These individuals obviously are not sophisticated international traders. They have no known background in international trade. There's a
great effort here to become involved. But for them to be chosen, one can only conclude it was based on their contacts with Ron Brown.
NARRATOR: In the end, Nora didn't go on the trip, but the Lum family was well represented on the trip by their daughter at the Commerce Department, Trisha.
Back on the paper trail in that room at the Commerce Department-- more evidence of the Lums-- here a document about a select group of executives that met to advise members of the president's cabinet on Asia trade policy. Included in that group were the CEO of Hughes Aircraft, the president of Martin Marietta and chairman of Dynamic Energy, Nora Lum. The occasion is
a state dinner at the White House for South Korean
President Kim Yung-Sam. There's Mrs. Clinton and Mrs. Kim, Senator Sam Nunn, Secretary of Defense William Perry, Senator John Glenn, the president-- and Nora Lum and her daughter, Trisha. It was a long way from the tourist shop in Waikiki. They had come so far so fast. Would anybody raise questions about their access, their connections? Someone did.
By the winter of 1995 Congress was taking a hard look at Ron Brown's activities. It was open season everywhere Ron Brown had worked, every
deal he had done, especially those trade missions at
the Department of Commerce. There were questions about criminal conduct, so an independent counsel was appointed. The counsel and his team of investigators reached back into Brown's past. One of the trails even extended all the way back to the Lums in Hawaii. FBI agents were dispatched to interview Tony Locricchio.
ANTHONY LOCRICCHIO, Public Interest Attorney: They were interested in a deposition which Eugene and Nora had given in our case, in which Eugene claimed he had no income
NARRATOR: Gene had taken the 5th Amendment when asked about political contributions, but the FBI was interested because the deposition was taken right after a big payout in the Dynamic Energy deal.
ANTHONY LOCRICCHIO: There $5 million check put in his bank account. When he said under oath he did not have any money, the FBI made the comment, "Liar, liar, pants are on fire," when they looked at Eugene's statements.
NARRATOR: Then agents worked Los Angeles. They were most interested in the Lums, Ron Brown and what happened to the money from APAC. Remember, there no records from APAC? Well the Lums have an unusual explanation. They say all their records were destroyed when a car crashed into the corner of their House. And the investigators turned to Oklahoma, where they examined the Lums' gas deal. They wanted to talk to the former owner of Gage, Ron Miller.
[interviewing] What did they want to know?
RON MILLER: Probably the same things that I'd like to know. I think they're trying to get-- put their hands on the weirdness of the whole thing, trying to put some real resolve to it, because there are so many things that just don't make sense in it.
NARRATOR: they were asking about Ron Brown, Michael Brown, Melinda Yee, off-shore banking accounts, political donations and, of course, Nora and Gene Lum.
There was one source I really wanted to talk to, someone close to Ron Brown. I had been trying to make contact for months. Then I got a call. We were to meet in another city. We agreed to tape an interview. But the source backed out of going on camera. We talked for five hours. This is what I can report. The source told me that Ron Brown encouraged the Lums to invest in the Democratic Party as a business investment and that partly explains why they got the Oklahoma gas deal. Both Michael and Ron Brown benefited from the Oklahoma deal. But that was as far as the source would go. The Lums deny it and Michael Brown won't talk.
It was back to trying to find out what happened with the independent counsel's investigation. Here at the Federal Election Commission, we ran all the political donations. Nora had spread some of her new-found wealth to Senator Edward Kennedy's campaign, to a Congressional race in Oklahoma and to President Clinton's re-election effort.
Then fate intervened. Ron Brown died in a plane crash while on a trade mission in Europe. For the independent counsel investigators, at least, the
inquiry into the Lums ended with Ron Brown's death. But for all that attention, the Lums were not cast off by the Democratic Party. At last summer's national convention they were listed as hosts and sponsors. They gave $20,000 at a gala for the president that netted over $2 million. Last fall Nora again visited the Commerce Department looking for contacts in China and help with business in Russia.
In January, the big prize and, as Bill Clinton
claimed his second term, Gene and Nora were
there, accompanied by Ron Brown's son, Michael. But for many others the wider scandals about Asian-American money made it a sad occasion.
DAVID LANG: It could have been a crowning achievement for the Asian-American community, but unfortunately it wasn't the case, okay? And so far, we haven't seen any major appointments in the Asian community. The investigation is going on. All our efforts in getting people involved politically in the last six, seven years have somewhat been affected. You know, I don't want to use, you know, the term "going down the drain," but I think our involvement at the, you know, national level has_ this is a serious setback. You know, I think it's a serious setback.
NARRATOR: Ten days after Bill Clinton won a second term as president, he set off for a trip to Asia. On the way he stopped in Hawaii for a round of golf with his old friend, former governor John Wahiee. In Hawaii some people believe in the Taoist circle, what we mean when we say "What goes around comes around." Remember Jenny Olinger, who placed a curse on anyone associated with the golf course? Well, it just so happened that the president had been invited to play golf on that
very course and it rained. The weather was not just
wet, but ruinously so. Clinton pressed on. "Aqua golf" one participant called it. It was such a bust that it seemed as if the site had been cursed.
And one last note. The Justice Department confirms that FBI agents are once again back in the field asking questions about Gene and Nora Lum.
ANNOUNCER: Still interested? Visit FRONTLINE's Web site at www.pbs.org. Play the fixers game of perks, access and influence. Enjoy the collection of money scandal cartoons, special reports on Asian-American political involvement and join in our discussion board. How would you clean up the system? And more at www.pbs.org.
Next time on FRONTLINE--
This is pure plutonium. It remains radioactive for hundreds of thousands of years. The thing we fear most about nuclear power, this radiation, can be blocked by a thin sheet of paper. What are we so afraid of? "Nuclear Reaction" next time on FRONTLINE.
Many of your letters about our program on the Rwandan genocide conveyed your horror at the scale of it and the larger question of why we stood by.
MARCY HARRIS: [Shreveport, LA] Dear FRONTLINE: It makes me ashamed of our country's response to the genocide. Why was nothing done once we knew that thousands of people were being slaughtered? If this were happening in France, the whole Western world would respond. Yet since it's in Africa, nothing is done. How shameful.
JOHN YACOPUCCI: [Durham, NC] Dear FRONTLINE: Claiming ignorance of the magnitude of human suffering is unacceptable. If journalists are both willing and capable of entering into scenes of mass murder, surely well-armed soldiers of the U.N. or U.S. could.
SANJEEV K. SINGHAL, M.D.: [Houston, TX]
Dear FRONTLINE: What amazes is that... we can remain a spectator when close to a million people are massacred. We write books, make movies about Holocaust and Second World War and then give them all the award, but when it comes to real genocide going on right now, we as a nation turn our head away as if it never happened. It is such a shame.
BLANCHE WATTENBERG NONKEN: [Wyndmoor, PA] Dear FRONTLINE: The phrase "just following orders" never seems to go out of style when mass murder is justified. "Never again" has become a mockery for a world that has turned a blind eye to what happened in Armenia, in the Nazy occupation, in China's invasion of Tibet and lately in Rwanda.
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