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Testimony Links Top China Official, Funds for Clinton

Ex-Democratic fund-raiser Chung told U.S. investigators that military intelligence chief secretly directed $300,000 to help president in '96. Embassy spokesman denies Beijing was involved in elections.

April 04, 1999|WILLIAM C. REMPEL and HENRY WEINSTEIN and ALAN C. MILLER | TIMES STAFF WRITERS

WASHINGTON — The chief of China's military intelligence secretly directed funds from Beijing to help reelect President Clinton in 1996, former Democratic fund-raiser Johnny Chung has told federal investigators.

Chung says he met three times with the intelligence official, Gen. Ji Shengde, who ordered $300,000 deposited into the Torrance businessman's bank account to subsidize campaign donations intended for Clinton, according to sources familiar with Chung's sealed statements to federal prosecutors.

During their initial meeting on Aug. 11, 1996, in Hong Kong, Ji conveyed to Chung the Chinese government's specific interest in supporting Clinton:

"We like your president," Ji said, according to sources familiar with Chung's grand jury testimony. Chung testified that he was introduced to the intelligence chief by the daughter of China's retired senior military officer.

Chung's testimony has provided investigators the first direct link between a senior Chinese government official and illicit foreign contributions that were funneled into Clinton's 1996 reelection effort. It is the strongest evidence to emerge--in two years of federal investigations--that the highest levels of the Chinese government sought to influence the U.S. election process.

Key aspects of Chung's testimony, which has not been made public, have been corroborated by financial records in the United States and Hong Kong, according to law enforcement and other sources.

It is illegal for U.S. political parties or candidates to accept contributions from foreign sources. Only a portion of the $300,000 made it into Democratic campaign coffers, records show.

A spokesman for China's embassy in Washington denied any involvement in the 1996 elections.

"We are very categoric in our denial of these allegations," said the spokesman, Yu Shuning. "All these allegations about so-called Chinese government officials' political contributions into U.S. campaigns are sheer fabrications."

This week, Chinese Prime Minister Zhu Rongji is scheduled to meet Clinton in Washington and attend a state dinner in Zhu's honor at the White House. Zhu will make the first stop of his U.S. visit in Los Angeles on Tuesday.

On Friday, White House spokesman Jim Kennedy said the administration had no knowledge about the source of Chung's donations during the 1996 campaign and declined to comment on "allegations regarding intelligence matters."

Chung, 44, a Taiwan-born American citizen who lives in Artesia, Calif., was one of the most prominent figures in the 1996 campaign finance scandal. He contributed more than $400,000 to various Democratic campaigns and causes, visited the White House no fewer than 50 times and brought numerous Chinese associates to events with the president and First Lady Hillary Rodham Clinton.

He pleaded guilty last year to election law violations and became the first major figure to cooperate with a Justice Department investigation of campaign finance abuses, including a probe into improper foreign donations. A number of contributors have been indicted in the scandal.

Chung's assistance earned him a strong recommendation for leniency, resulting in a sentence of probation and community service in December. Chung has told friends that he would like to write a book about his experiences.

Gen. Ji, the Chinese intelligence chief, was named by Chung in sworn grand jury testimony and in statements made to Justice Department investigators during extensive interviews from December 1997 through March 1998. Chung also turned over cartons of financial records.

Chung told investigators that he and Ji were brought together by Liu Chaoying, the daughter of retired Gen. Liu Huaqing. At the time, she was a Chung business partner as well as a lieutenant colonel in the People's Liberation Army.

Leads Provided by Chung Pursued

Federal prosecutors assigned to the Justice Department's campaign-finance task force are pursuing leads provided by Chung. They praised Chung's cooperation in U.S. District Court papers that remain sealed, in part, due to national security concerns, sources said.

Chung's relationship with federal authorities took a dramatic turn last spring when teams of federal agents moved him and his family into protective custody, law enforcement sources told The Times.

The FBI feared for Chung's safety after he received veiled threats and bribe offers from individuals pressing him to keep silent about his China dealings. Those concerns grew after the FBI received information from overseas indicating that Chung could be in danger.

For 21 days in May and June, Chung and his family were kept under 24-hour guard in hotels near Los Angeles International Airport by teams of heavily armed FBI agents. And, as recently as two weeks ago, special agents again secluded the Chung family in a Torrance hotel for three days over still-unexplained safety concerns.

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