WASHINGTON — The Justice Department, proceeding with its controversial investigation of campaign fund-raising irregularities, on Monday charged Thai businesswoman Pauline Kanchanalak and her sister-in-law with conspiring to funnel illegal foreign money into President Clinton's 1996 reelection campaign.
The 24-count indictment returned by a federal grand jury makes Kanchanalak and Duangnet "Georgie" Kronenberg the 10th and 11th persons charged since last fall in the mushrooming investigation of allegations that Democratic fund-raisers channeled foreign contributions into Clinton's reelection effort.
Kanchanalak's activities allegedly were responsible for one of the largest blocks of tainted foreign donations, and her case illustrates what many critics have charged was the sale of White House access for campaign cash.
As the investigation gains more momentum, chief Democratic fund-raiser John Huang remains the key figure still under scrutiny. Over the last two years, the Democratic National Committee has returned more than $3 million in possibly tainted donations, more than half of it raised by Huang, who lives in Glendale.
Erik L. Kitchen, an attorney for Kanchanalak, said she is the victim of "a political controversy relating to DNC fund-raising practices." Claiming she will ultimately be vindicated, Kitchen said that the indictment of Kanchanalak "continues a pattern of the government inflating alleged [Federal Election Commission] violations into massive felony charges."
Neither Kronenberg nor her attorney could be reached for comment.
Central to the case against Kanchanalak, 47, was a Democratic-sponsored coffee with the president that Huang orchestrated on June 18, 1996. The coffee--in the White House Map Room, as were dozens of other similar events--was attended by a handful of foreign nationals who could not legally donate to U.S. political campaigns.
Within a week after the event, Kanchanalak and Kronenberg, who were present at the coffee with Huang, made three contributions totaling about $150,000. The indictment alleged that the two women "used funds from foreign corporations and individuals to make prohibited campaign contributions totaling at least $679,000 to the DNC and other [state] political committees located in the United States."
The California Democratic Party received $54,500, although the grand jury found no evidence that officials knew the money was questionable.
Kanchanalak, a Thai citizen, brought executives of a Thai company she was representing, C.P. Pokphand, to the coffee. The indictment charged that "this access [to the White House] was intended by the defendants to impress clients and help their business ventures."
According to the grand jury, the company's chairman addressed Clinton about "economic and political issues relating to the relationship between the United States and the People's Republic of China." C.P. Pokphand is reputed to be the single biggest outside investor in China.
Donald Fowler, then-chairman of the Democratic National Committee, also attended the coffee, which was heavily featured in Senate fund-raising hearings last year. Another attendee, Karl Jackson, president of the U.S.-Thailand Business Council, told senators last year that Huang stood up at the event and openly solicited contributions from the group. Fowler and the White House disputed Jackson's testimony, noting that he is a former Bush administration appointee, and denied that the coffees were fund-raisers.
The grand jury found that other illegal funds furnished by Kanchanalak and Kronenberg followed an Aug. 18, 1996, Democratic Party event in New York to celebrate Clinton's 50th birthday.
The indictment said that the illegal foreign-sourced contributions were funneled through the accounts of Kronenberg and Praitun Kanchanalak, Pauline's mother, both of whom were qualified as green card holders to make U.S. political donations with their own funds.
Because the true source of the donations allegedly was disguised, Pauline Kanchanalak and Kronenberg, who is 41, were charged in 13 counts with causing false statements to be filed with the Federal Election Commission.
The other 11 counts accuse the two defendants of violating the ban on corporate contributions by making so-called "conduit" donations and of conspiring to obstruct justice by having corporate documents removed and computer hard drives erased in an effort to destroy evidence relevant to the investigation.
Justice Department officials said that Kanchanalak is believed to be in Thailand and prosecutors obtained a bench warrant for her arrest from U.S. Magistrate Judge Deborah Robinson. Kronenberg lives in suburban McLean, Va.
Atty. Gen. Janet Reno, who has resisted demands from Republicans in Congress to seek appointment of an independent counsel to examine 1996 campaign abuses, said that the Justice Department's "largest criminal investigation" is picking up steam.