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DEMOCRATS RETURN MORE DONATIONS : INTERNAL AUDIT.

Byline: Robert A. Rankin and Josh Goldstein Knight-Ridder Tribune News Wire

The Democratic National Committee is returning an additional $1.5 million in improper 1996 campaign contributions from 77 donors, most of them Asians or Asian-Americans, party Chairman Roy Romer announced Friday.

Romer, who also is governor of Colorado, said the Democratic Party ``made a mistake'' by not screening contributions closely enough in the past two years and is applying new rules to make sure it doesn't happen again.

The admission was the latest embarrassment for Democrats, who face investigations into whether they opened themselves to corruption in their quest for victory last year.

Romer vigorously defended President Clinton's courting of donors as the granting of innocent favors that did not sway public policy. But a federal grand jury and committees from both the House and Senate are examining the mushrooming campaign-finance controversy, which has kept Clinton and the Democrats on the political defensive since October.

Previously, the Democratic National Committee had returned $1.47 million in tainted contributions from 16 donors. The newly rejected contributions bring the total to almost $3 million.

Of the total, 75 percent came from donations made or solicited by three Asian-Americans: John Huang, Yah Lin ``Charlie'' Trie and Johnny Chung. Huang was a Commerce Department official with ties to an Indonesian conglomerate, the Lippo Group, and he later worked as a fund-raiser for the Democrats. Trie is a Little Rock businessman with an office in Beijing. Chung is a California entrepreneur who used his donations to gain entree to the White House and bring along Chinese business contacts.

The questionable donations were identified in an internal audit by Ernst & Young, a major accounting firm whose auditors sometimes interviewed donors in Chinese. Only Americans or foreign nationals living legally in the United States can donate to candidates, but the rules are less clear on contributions to parties.

The party said it returned donations that appeared to be inappropriate or came from contributors whose backgrounds could not be verified.

Federal investigators are probing whether the Chinese government funneled money illegally to Democratic campaigns, according to recent reports in The Washington Post.

Beijing denies it, and Judah Best, a top Washington lawyer who organized the Democrats' internal audit, said Friday that the party's investigation produced no evidence of Chinese government involvement.

Memo surfaces

Additional fuel for the campaign-finance controversy surfaced Friday, however, in the form of a document turned over to House investigators Thursday night from the files of former White House deputy chief of staff Harold Ickes, who coordinated campaigns for Clinton and the party.

The document, a memo addressed to former party aide Martha Phipps from an unidentified author, indicates that Democratic fund-raisers hoped the White House would grant special privileges to favored donors, including reserving two seats for them on Air Force One trips and ``better coordination'' in selecting appointees for government boards.

Other proposed perks for big donors included reserving six to eight seats at private presidential dinners and at White House events, participation in official trips abroad, overnight stays at the White House and visits to its residential quarters, and access to the White House cafeteria.

Party officials claimed mystification over who wrote the memo. ``It looks to us like a wish list written by someone who clearly did not understand the rules,'' said Steve Grossman, party co-chairman.

White House press secretary Mike McCurry said some of the favors requested in the memo obviously had been granted - such as overnight stays at the White House - while others had not.

Ickes' attorney, Robert Bennett, issued a statement saying all the documents he turned over to House investigators ``simply reflect long-established practices of both political parties because of the tremendous demands placed upon them to finance campaigns.''

President takes blame

``As the president recently stated, he accepts personal responsibility for the excesses in campaign fund raising,'' special White House counsel Lanny Davis said in response to questions about whether Clinton assumes any responsibility.

Democratic Chairmen Romer and Grossman tried to take the offensive against Republicans by claiming they bent public policy to please backers while the only favors Clinton granted to big donors were innocent perks of ``face-time'' with them - inescapable in modern politics, Romer said.

``I think it's a whole lot better that we reward people with perks rather than with policy,'' Romer insisted.

He said the reality of campaign finance in America requires all politicians to curry favor with donors, whether by sending them Christmas cards or inviting them for coffee at the White House. But he said Republicans invited industrial lobbyists to rewrite laws on workplace safety and environmental protection when the GOP gained control of Congress.

Donor perks

The unsigned memo found in Ickes' papers suggests lists 10 perks that could help Democrats ``reach our very aggressive goal of $40 million this year:''

Two seats on Air Force One and Air Force Two trips.

Six seats at all private dinners.

Six to eight spots at all White House events, including ceremonies, official visits and entertainment.

Official delegation trips abroad.

``Better coordination'' on appointments to boards and commissions.

White House mess privileges.

White House residence visits and overnight stays.

Guaranteed Kennedy Center tickets.

Six radio-address spots.

Photo opportunities with principles.

The memo suggested that raising more than $40 million goal would require two additional presidential events outside of Washington, D.C.

CAPTION(S):

Box

Box: Doner Perks (see text)
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Publication:Daily News (Los Angeles, CA)
Date:Mar 2, 1997
Words:898
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