The seeds of the current campaign funding controversy involving illegal foreign
money sources, Asia connections, trading cash for access, failure to screen
big donors -- were seeds that had already sprouted five years earlier in the
story of a mysterious businessman and Republican Asian-American contributor
named Michael Kojima.
This L.A.-based entrepreneur with a history of broken marriages and failed
businesses had been the biggest individual contributor to President Bush's '92
re-election campaign. His small company, International Marketing Bureau (IMB),
whose only officers were Kojima and his wife, donated $598,770 to the Republican Party. This
generosity netted him a seat at the head table of 'The
President's Dinner,' a '92 fundraising gala for President and
But according to a statement Kojima made at the time, and based on a document
submitted to verify his funds, Kojima claimed he was being bankrolled by a
shadowy off-shore corporation registered in the British Isle of Jersey. If
this claim is true, then a foreign group pledged to deposit over $1.2 million in his
L.A. bank account just two weeks before he began making heavy soft-money
contributions to the Republicans. And thus the Republican Party accepted and
never returned hundreds of thousands of dollars in illegal foreign campaign
contributions that came through Kojima.
Commenting on the Michael Kojima story, Lisa DeGrandi who worked on the
Republicans' '92 fundraising campaign says, "People (in political fundraising)
did whatever it took to get the donation back then. I have no sense where his
money came from. And we didn't ask. We just assumed he was a generous person.
We didn't raise questions about donors back then -- no one did."
Common Cause called for an independent prosecutor to investigate into
Kojima's contributions after he was exposed in April 1992 as a bankrupt chef
owing nearly a million dollars child in support payments and unpaid loans. Yet
despite the obvious question - where did Kojima get his money? - no
investigations or actions were undertaken by the Republican Party, the Justice
Department, or the Federal Elections Commission. After reviewing the case, the
Justice Department determined it was "not worth opening up a criminal
Campaign finance reformers charge that this failure to pursue the Kojima case
five years ago led both parties to ignore warning signs that might have
prevented the current controversy of improper contributions to the Democrats
"Kojima was the early warning signal in '92 and neither party paid attention to
it," former Common Cause president Fred Wertheimer told The Washington
Post last October as the present scandal began to erupt. "Now, four years
later, the Clinton administration is paying a heavy price...The reason it
happens is because of the attitude: We want as much money as possible from
whoever we can get it from and we don't really care about who the donor is or
what he wants."
After FRONTLINE and the Center for Investigative Reporting (CIR)
reported on Michael Kojima in an October 1992 FRONTLINE broadcast, "The Best Campaign
Money Can Buy,' CIR followed up by filing Freedom of Information Act (FOIA)
requests about Kojima's activities. Here's what was discovered.
The Murky Money Trail
Following the 'deadbeat dad' news reports and Kojima's arrest briefly in Utah in late 1992,
the Republican Party placed $500,000 of Kojima's donation into a federal court
escrow account and asked a judge to determine which creditors were due the
money. A court order three years later allowed the Republicans to keep
$215,000, while splitting $285,000 among a limited partnership, Lippo Bank, and
one of Kojima's former wives. But there was a lot more to be learned about the
origins of his campaign donations in the years that followed.
According to a 1992 statement Kojima submitted to Harvard University - to which
he also made a major donation - the offshore banking facility registered in
Great Britain's Isle of Jersey pledged to deposit $1.2 million to a bank
account. Both his Harvard and Republican donations were made from that same
Los Angeles bank account, sources said at the time. Kojima had arranged this
letter of commitment to be sent to Harvard' s Middle East Institute to verify
that he could make good on his pledged donation of $205,000.
However, the letter, dated February 7, 1992, was formally addressed not to
Kojima, but to a business associate from Japan named Tsunekazu Teramoto. And
the document bore the signature of Kazuo Sano, who identified himself as
chairman of the Isle of Jersey off-shore firm, Sanach, which conducted
"commodity contract exchanges."
The statement of commitment reads: "I , Kazuo Sano, Chairman of Sanach
Investment Ltd., Jersey, U.K., herein confirm that US $1,225,000.00 will be
remitted to the designated bank account on 18th or 19th of February, 1992.
Therefore, the fund which includes the loan and the donation you requested is
to be available on 20th, February, 1992."
The company's registered agent on the Isle of Jersey stated the company had
"ceased to exist" in the last year or two and they had no idea where Mr. Sano
was. A company that owned Sanach's tony leased quarters in London's Mayfair
district says that a Sanach official had abruptly abandoned the office in the
late 1980s, leaving months of rent unpaid. According to British corporation
records, the company had taken over a previously existing British firm, changed
the name, and declared itself an off-shore banking facility that specialized in
currency exchange and gold transactions.
Exactly where the Sanach funds may have originated is difficult to determine,
but a likely place seems to be Japan where Sanach's Sano and a vice president
listed their addresses. One way to find some answers may be through an
official investigation like those now being undertaken in Congress on campaign
Records indicate that Sano' s company Sanach is closely tied to Kojima's IMB.
Teramoto - whom Kojima frequently introduced as head of his company in Japan -
has also identified himself as a vice president of Sanach, according to records
released under the Freedom of Information Act. Together with Kojima and his
wife Chiey Nomura, Teramoto sponsored an elaborate April 1, 1992 Republican
event a few weeks before the Presidential Dinner called the "Spring Policy
Forum. " The program for the event ( whose special guests were President and
Mrs. Bush and Senator and Mrs. Phil Gramm (R-TX.), identifies Teramoto as
"I.M.B. of Japan."
The exact operations and activities of Kojima's IMB are unclear. The company"s
official corporate filing states that it acts as a business consultant. Kojima
often described himself as representing major business interests -- a
hotel in Florida, a mass transit project in China, an international
consortium interested in building an airport in Hong Kong, and environmental
and oil interests in the Middle East and California.
Sources from ex-wives to law enforcement officials described Kojima as an
affable name-dropper who enjoyed the limelight and tried to use the honorary
titles and letters Republicans awarded to big donors to suggest that Kojima
had a personal connection to the President of the United States.
In Asia, the U.S. and elsewhere, Kojima sent out Christmas cards to associates
showing him and Nomura with President Bush. He frequently wore a lapel pin
identifying him as a member of the "President's Roundtable" - an honor
bestowed upon only the biggest Republican donors. The back of his
noted that he had been an "official member since 1986.".
There is no allegation that President Bush had any personal relationship with
Kojima beyond a White House group meeting offered by Republican fundraisers to
their most elite donors. But Kojima was close to the National Republican
Senatorial Committee, chaired at the time by Senator Gramm. Using stationery
from the "Presidential Roundtable" (a Republican national fundraising arm),
the Senatorial Committee issued letters on Kojima's behalf that sought special
attention and access from government officials and American embassies in Hong
Kong and Tokyo.
The Rewards of Political Donations
In early 1991, Kojima donated $20,000 to the Republican Party through his
company IMB. Documents obtained under the FOIA show that Senator Gramm wrote a
"Dear Michael and Chiey" letter dated August 8, 1991 to announce the Roundtable
was granting them "a full and complete SENATORIAL COMMISSION."
In the letter, Gramm quoted from their nominating petition: "Mr. and Mrs.
Michael Kojima represent the best that our Party has to offer..." But former
Roundtable director Lisa DeGrandi downplays the significance of this particular
honor. "Oh, the Senatorial Commission letters went to everyone; they were the
tackiest thing. It was no big deal to receive one," she explained.
On the same day, August 8, as Senator Gramm's senatorial commission letter for
the Kojimas, DeGrandi also wrote letters of
introduction for him (on 'Roundtable' stationery) to top government officials
in Hong Kong. One letter mentioned that Kojima was an executive member of the
Roundtable, "a business advisory group to the President and the
administration." It also indicated that copies were being sent to President
Bush, Prime Minister John Major, the Governor of Hong Kong, and several
When asked about the letters, DeGrandi at first said she remembered Michael
Kojima, but that her memory of specific letters was not good. She added
however, that "if my name is on the letter, then it's OK." She explained that
"it was not uncommon to send out letters on behalf of donors back then
(1991-92), " but who knows what he did with the letters we sent."
Soon after DeGrandi' s August 8, 1991 letters to Hong Kong officials on
Kojima's behalf, letters from Kojima arrived at the U.S. Embassy in Japan
requesting that the embassy act as a reference for Kojima with Japanese
businessmen and stating "I have been cleared by the CIA, FBI, and all local
authorities." Lisa DeGrandi was given as a reference.
In addition, fax transmissions in support of Kojima began arriving at the Tokyo
Embassy from Senator Frank Murkowski's office (R-AK) about the same time as
Michael and Chiey each made $1500 contributions to Murkowski's upcoming
senatorial re-election campaign.
You Can't Always Get What You Want
Yet Kojima apparently was disappointed in the access that his contributions had
bought him. In an October 2, 1991 letter to a U.S. Embassy official inTokyo,
Kojima expressed frustration that the embassy was not helping him gain the
business appointments in Japan. "I was surprised by response to Senator
Murkowski' s fax in which he asked you to extend a courtesy to me by making
some appointments with Japanese banks for me (sic)." Kojima repeated his
request that all references about him be referred to Lisa DeGrandi and said
that he was interested in making sure that American companies participated in
the construction of a new airport in Hong Kong.
Embassy officer John Weeks, who met with Kojima and his partners, questioned
the apparent official Republican Party request at the time. He reported that he
could not understand why he should help out Kojima and his partners when a
consortium they had formed in an apparent attempt to construct the Hong Kong
airport appeared to have no American funding.
Kojima's vague, but angry, response was to
write that "I was deeply disappointed with the outcome and the misunderstanding
that came about."
Now that debate has erupted over President Clinton's problems with questionable
campaign contributions Democrats are resuscitating the Kojima incident as proof
that the current money- raising flap is endemic to the system.
Moreover, the press and some Democrats have claimed Kojima and Clinton had the
same contributor- the Lippo Bank. On a March 2, 1997 ABC News program former
Clinton Administration official George Stephanopoulos asserted "I read a story
this week that was shocking. It was about a Japanese-American who borrowed
$600,000 from the Lippo Bank, gave $500,000 to the party and got to sit next to
the president and helped with his business in return. The man's name was
Michael Kojima. The party was Republican. The president was George Bush.
"This is not new," Stephanopoulos argued. "It's not good, but it's not new."
And Senator Carl Levin, (Mich.-D) last January cited the Kojima case as a
reason why the Senate Governmental Affairs Committee should broaden the scope
of its inquiry into campaign financing and look at abuses by both Democrats and
Republicans and at both Presidential and Congressional fundraising. "Why
shouldn't that be within the scope of the Committee's investigations, even
though it involves the
1992 election, not the 1996 election?" he asked. "Fairness and the public
interest require that it should be."
However, it seems unlikely that the source of Kojima's donation was Lippo Bank
which had sued Kojima in Los Angeles Superior Court for failing to repay
business loans he had taken out in the 1980s. At the time of Kojima's donation
to the President's Dinner, Lippo Bank had a two-year-old judgment against him
for $586,000 and ultimately was awarded less than half of that by the federal
judge assigned to divvy up $500,000 of Kojima's donation among creditors. The
bank never made any serious claim it had a prior right to the money based on
the premise that its loan had been re-routed into Republican coffers.
R. Michael Rauh, the attorney representing Lippo Bank in the case at the time,
dismissed suggestions that Kojima had saved bank funds to give to Bush's
re-election effort. "There's the bank loan and the campaign contribution," he
said. "You' re talking several years apart."
According to a resume he prepared, 55 year-old Michael Kojima was born in Japan
and studied political economics at a university in Yokohoma, where he graduated
in 1964. He began a business career as a merchandiser and assistant manager
and noted on his job applications he changed jobs because he was "ambitious."
He came to the United States in 1972 and settled in New York while working for
a large Japanese iron and steel company, but soon moved to Los Angeles to work
for a U.S. firm as a sales supervisor.
By 1975, he had taken a general manager job with a gardening service company in
San Francisco and was attending classes at San Francisco State University. He
still gave Tokyo as his permanent address while job-hunting for a sales
management position in the import/export business. An acquaintance at the time
describes him as brainy and a good writer, but someone who worked for a
"dreamer who eventually went bankrupt."
By this time, Kojima had two sons with Soon Kojima, whom he would divorce in
1976 but then remarry for a short time. Both sons have referred to their
father as a "con man" in press reports about his political donations because he
owed thousands of dollars in child support payments and had never repaid a
$100,000 loan from Soon secured by her house.
Kojima then married Chong (Connie) Kojima and they had two daughters. By the
time news reports surfaced about Kojima's '92 campaign contributions, the Los
Angeles District Attorney's office estimated he owed roughly $100,000 in back
child support for the children, including interest and costs.
Returning to southern California in the 1980s, Kojima developed several
well-known Chinese restaurants with names like Monkee and Mandarin Cove. But
they all failed by the end of the decade and Kojima owed about $600,000 to the
Indonesia-based Lippo Bank. In addition, he also ended up owing $280,000 to a
North Carolina seafood company that sold Kojima fish he transhipped to Tokyo.
About the time Michael Kojima married Chiey Nomura in the 1980s, records show
he began to make political contributions, the first going to a Los Angeles City
councilmember in 1986. Kojima would later give a business card to the Tokyo
embassy in 1991 that stated he was an "official member" of the Republican
Party's Presidential Roundtable since 1986 (although the first record of a
political contribution like this is in 1988 when he gave $4,000
to the National Republican Senatorial Committee.)
A 1989 $5,000 check to Bob Dole's PAC 'Campaign America' bounced, and a $10,000
contribution to Senator Gramm in 1992 had to be returned because it violated
limits on donations.
Kojima remains elusive and is once again a "dead-beat dad" sought
by L.A. authorities for unpaid child support. Connie Soon says he has failed
to pay costs for his two daughters that could amount to tens of thousands of
dollars awarded her in a modified support order. She added that her ex-husband
has failed to correspond with his daughters despite their letters to him.
Kojima's IMB is still registered as an active corporation in the Japan-American
Cultural Center in downtown Los Angeles - a building supposedly set up to house
non-profits. Records show that the office is listed under his wife, Chiey
Nomura, who operates under the corporate acronym ARC. ARC is attached to two
corporations (one a non-profit) that have both been suspended for several years
by California's Franchise Tax Board.
The California' s Attorney General in 1992 and 1993 notified the non-profit
ARC that it failed to file the appropriate reports, in violation of state law.
There was never a response.
Chiey Nomura did not return telephone calls. Someone answering the ARC phone
took a message requesting an interview with Michael Kojima, but there was never
a reply. The best indications are that both Kojima and his wife continue to
operate out of this office. Neither has been listed as a political contributor
since their attendance at the '92 Republican President's Dinner became a
Jan Baran, an attorney for that '92 gala said in an
interview that the Republican Party never investigated the source of Kojima's
money because "there was no allegation of illegitimacy" and because he knew of
no allegation that it came from a foreign corporation.
"It was confirmed that he (Kojima) was an American citizen and that his company
was an American company," he said. "This was not a federal issue. It was a
private dispute among creditors."
Laurie Becklund, a former Los Angeles Times staff writer, now publishes
NETDAY WIRE. Dan Noyes is executive director for the
Center for Investigative Reporting.