the fixers

Kojima The Story of Michael Kojima.....a scandal foretold? By Laurie Becklund  and Dan Noyes

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 Mrs. Bush.

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 investigation."

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 in 1996.

"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.

Japanese Connections?

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 funding.

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 Japanese-owned resort 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 business card 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 businessmen.

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."

Lippo Redux?

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."

Kojima's Background

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 Today....

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 political embarrassment

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.

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