The China connection.

###FRED THOMPSON

Mr. Thompson, U.S. senator from Tennessee, is chairman of the Committee on Governmental Affairs.

On May 15, the New York Times broke the story that in 1996 Johnny Chung, a major Democratic fundraiser, took $300,000 originating from Chinese military intelligence to contribute to the Democratic National Committee. The Chung revelations have suddenly rekindled interest in the campaign-finance investi- gation my Senate committee conducted last year. But the new information isn't really that new, only seeming to confirm the so-called "China Plan" I first disclosed in July 1997.

The history of the China Plan investigation by the Committee on Governmental Affairs began with media reports. In February and March of last year, while we were waiting for Senate Democrats to end their gamesmanship over authorizing the investigation, Bob Woodward and others reported that American intelligence agencies had evidence of Chinese officials' planning to funnel contributions into American campaign coffers. These front-page stories appeared well sourced and reliable. Given what was already known about the foreign lineage of many suspicious DNC contributions, I directed the committee staff to investigate what the U.S. intelligence community knew about Chinese efforts to influence our election process. I believed that surely all the members of the committee would close ranks on a matter of such importance to our national security, no matter where the trail led. And surely the intelligence agencies would have a handle on the subject matter.

I was wrong on both counts. It quickly became apparent that the intelligence agencies had not undertaken serious assessments of Chinese activities, nor were they very good at sharing information among themselves.

Nevertheless, what was in the intelligence files was disturbing. The Committee saw evidence of a plan approved in mid 1995 at the highest levels of the Chinese government to increase China's influence over our electoral process. Although the Chinese plan contemplated legitimate activities akin to lobbying, it also included illegal activities. The evidence indicated the Chinese were at least considering funding, directing, or encouraging contributions to American campaigns. By this time, of course, the DNC had returned millions of dollars that looked suspiciously foreign. Our public investigation was begin- ning to trace much of the money to people connected with China. Our suspicions seemed to echo those of the FBI. In mid 1996 the FBI had briefed seven members of Congress and the National Security Council about Chinese efforts, describ- ing illegal plans for the clandestine funding of American political campaigns. This had been reported in the press.

In June 1997, I and other members of the Committee, both Republicans and Democrats, held a closed-door meeting with the heads of the intelligence agen- cies to discuss the intelligence thus far gathered. I wanted them to appear as witnesses before the committee, a suggestion they resisted mightily because they feared that public exposure could compromise their sources and methods. These concerns sounded reasonable, and so we discussed as an alternative my giving a brief public statement describing in general terms what the committee had found, this statement to be sanitized ahead of time of any details that might reveal the agencies' sources and methods. They agreed. So far, so good.

On July 1, I drafted my statement and sent it to the agencies and also made it available to Senator John Glenn, the ranking Democratic member of the Commit- tee. A week of negotiations with the agencies ensued over the precise wording of my proposed statement. When it became final, I asked Senator Glenn to join me in issuing it, which he declined to do.

As our hearings approached, I had a difficult decision to make. I had a divided committee, a cutoff date on the investigation, an unfocused intelligence community, and a Justice Department Campaign Finance Task Force in disarray. No one seemed to be aggressively pursuing this matter. I could sit on the information and run the risk that it would never come out, or I could tell what we knew and try to force the issue.

I delivered the statement on the opening day of the hearings, July 8. The statement told in general terms of the existence of a Chinese plan and the fact that the plan contemplated illegal activity; it observed that although the plan focused primarily on Congress, "our investigation suggests it affected the 1996 presidential race and state elections as well."

The partisan counterattack started immediately. Some Democratic Committee mem- bers took strong issue with what I said. We clearly had different views even though we had access to the same intelligence information. Following their lead, sources at Justice scrambled to minimize the role the FBI had in assist- ing with my statement.

While the attacks on my statement would continue to be a distraction, we went ahead with reviewing the intelligence work. That task was complicated by the fact that the agencies were unaware of some extremely relevant information sitting in their own files. Twice, for example, late in our investigation, Justice apologized for its lateness in providing important revelations about key China-related campaign-finance figures. The information had languished in its files for months and sometimes years.

Despite the problems, we uncovered additional evidence indicating that Chinese officials had not simply formulated but also implemented their plan. We reviewed information regarding political efforts directed by Peking and its diplomatic posts in this country, including some specifics on illegal activity, most of which remains classified. Perhaps more importantly, we learned names. Information surfaced about the ties to the People's Republic of China of several prominent DNC fundraisers -- Maria Hsia, Ted Sioeng, John Huang, Mochtar and James Riady, and Charlie Trie.

The most precise information concerned Ted Sioeng (who contributed $400,000 to the DNC) and Maria Hsia (who helped organize the April 1996 Hsi Lai Temple fundraiser the Vice President attended). At the suggestion of the agencies, we identified Mrs. Hsia as a clandestine agent of the Chinese government and Sioeng as a longtime worker on behalf of the Chinese government who reported to Communist officials in Beijing. All these individuals have taken the Fifth Amendment, fled the country, or both. And although Chung is the hot news, these people funneled $4.5 million into the DNC.

The committee's final report sets forth the results of our investigation to the fullest extent publicly possible. The committee concluded that in the light of the plan, the ties of many leading Democratic fundraisers to the PRC government, and the money trail leading back to the Greater China area, "there is strong circumstantial evidence that the PRC government was involved" in funding, directing, or encouraging illegal contributions to American political campaigns during the 1996 election cycle. We emphasized that while the intelligence information seemed pretty clear it did have some gaps. Moreover, no consensus existed regarding whether we were witnessing a single plan or a series of possibly coordinated efforts by different parts of the Chinese gov- ernment. Again, we vetted the report with the intelligence agencies, and they carefully scrubbed potentially source-identifying information.

Nevertheless, many media accounts characterized the report as interesting but a failure because we did not demonstrate conclusively the flow of specific Chinese dollars into specific campaigns. The Democrats on the committee issued a minority report which minimized and denigrated the significance of our find- ings.

Now Johnny Chung has gotten everyone's attention. However, Chung is describing events that are two years old. One must wonder if the trail has gotten cold while we have been arguing. On the public record, we have had press accounts, FBI briefings to members of Congress and the National Security Council, and our committee report -- all demonstrating a China plan and strong evidence of Chinese money. However, in today's partisan atmosphere, the message seems to be, "Prove it all conclusively and immediately or discuss it at your own risk."

It's a trap Republicans may fall into again. Now that we also know that Presi- dent Clinton was loosening restrictions on technology transfers to China at the same time that Chinese money was coming into his campaign, everyone is jumping to the question of quid pro quo, something that is almost never prov- able by direct evidence. While this must be vigorously investigated, Congress should not allow itself to slide past the Chinese-money issue, a major scandal with serious ramifications, and on to something very unlikely to produce a "smoking gun."

However, it is aggressive criminal prosecution that is most likely to convince others, like Chung, to talk. The prospect of jail time and the need to make a deal are powerful incentives. Ask John Dean.