DNC Seen as Exploring Foreign Funding in 1991

WASHINGTON —  In cinematic terms, it may well have been the prequel to the epic 1996 Democratic fund-raising debacle.

Foreshadowing key elements of last year’s campaign-finance controversy, then-Democratic National Committee Chairman Ronald H. Brown and a coterie of Asian American activists--individuals who now are central to federal investigations of foreign campaign contributions--traveled to Taiwan, Hong Kong and Hawaii in late 1991. Their itinerary included meetings orchestrated by the fund-raisers, and their plans called for assessing future prospects for raising money in Taiwan and Hong Kong, according to a review of previously undisclosed records.

Examined in hindsight, information about Brown’s involvement in the trip could undercut efforts by Democratic officials and the White House to portray foreign-linked fund-raising activities as the work of rogue, low-level individuals operating without party knowledge or supervision.

The 1991 trip, which has yet to draw the scrutiny of investigators, suggests that Brown, who later became President Clinton’s Commerce secretary and died last year, may have played a significant role in laying the groundwork for the Democrats’ foreign-linked fund-raising. Money funneled into the DNC from Asia is at the core of ongoing Justice Department and congressional probes.

Brown “knew that the mother lode for Asian money was closely connected to Taiwan and Jakarta and Hong Kong,” said a confidant. “Ron always had dual purposes in everything . . . one was raising money for the DNC.”

However key the 1991 trip might be to getting to the bottom of the fund-raising irregularities now being investigated, it is likely that at least some of the information about the venture never will be uncovered.

Brown and Bill Morton, a DNC aide on the trip who later worked at the Commerce Department, both perished when a plane carrying them and 32 others crashed in Croatia in April 1996.

Reid H. Weingarten, Brown’s attorney when he died, said he knew nothing about the 1991 trip.

The DNC entourage was joined in Taiwan by John Huang, who solicited at least $1.6 million in questionable foreign-linked contributions for the DNC in 1996, and Maria Hsia, who teamed with Huang to plan the controversial 1996 DNC fund-raiser at a Buddhist temple in Hacienda Heights, Calif.

Hsia was to set up two lunches and a dinner in Taipei.

Brown thus became the first DNC chairman to visit Taiwan, which now is being examined as a possible source of illegal overseas funds.

In Hong Kong, Brown and his DNC colleagues were scheduled to attend a lunch and a dinner hosted by the Lippo Group, the Indonesia-based conglomerate that donated large sums to the DNC to support Clinton’s presidential bids--and employed Huang as its chief U.S. executive.

In Hawaii, Brown went to a lunch arranged by Nora T. Lum, who, along with her husband, Gene, subsequently became Asian American fund-raisers for the DNC in Southern California with Brown’s blessing. The couple pleaded guilty last month to funneling $50,000 in illegal contributions to Democratic campaigns in 1994 and 1995.

The 10-day trip was orchestrated by Melinda Yee, then the DNC’s liaison to Asian Americans. She was later allied with Huang and the Lums in 1992 California fund-raising efforts.

Brown flew to Taipei at the invitation of the Taiwan government and met with government and political officials, including President Lee Teng-hui.

“He was going to talk about the U.S. political process,” said Steve Lande, a Washington trade expert who accompanied Brown on the Taiwan leg of the trip and participated in the meetings.

The meetings also were designed to “raise Ron Brown’s stature as someone who was familiar with foreign policy, economic affairs and other international issues,” said Peter J. Kadzik, an attorney retained by the DNC.

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But DNC documents show that in both Taiwan and Hong Kong, there may also “have been prospecting” for fund-raising, Kadzik acknowledged.

The records indicate that “there certainly could have been some sort of attempt to see whether some kind of fund-raising was possible. But we don’t have a firm indication that this did occur,” he said.

While it is legal to raise money from U.S. citizens or legal residents living abroad and from U.S. subsidiaries of foreign companies--the prospects that the DNC maintains Huang was exploring when he went to Taiwan last year--it is illegal to generate contributions from nonresidents or overseas companies, which Huang did in other instances in 1996.

The DNC, which is skittish about the little-noticed 1991 mission, declined to turn over to The Times any documents from the trip and responded only to written questions.

“We’re hampered by the time lag, by the absence of the people who were there firsthand and the fact we’re otherwise overwhelmed” by subpoenas from investigators, Kadzik said.

He added that the DNC would not be eager to have investigators probe the events of 1991 because “it would just further deplete the resources of the party.”

Much remains uncertain about the Asian journey:

* While the DNC did not deny that the trip may have been part of a preliminary effort to raise funds overseas, officials said they “do not know if any fund-raising contacts were made.” Party records show no late 1991 or early 1992 contributions “related to the Taiwan or Hong Kong portions of this trip,” they said.

* The DNC said it could find no records showing any expenses that the party definitely paid for the trip.

The Kuomintang, Taiwan’s ruling party, may have financed the Taiwan segment, they said. In fact, officials said they could locate only the proposed itinerary for the trip but could not confirm which of the planned events took place.

* The DNC said it could not confirm Huang’s participation, had no additional information about Hsia’s role and did not know the nature of the Lippo events.

Trip participant Maeley Tom, a longtime Sacramento-based Democratic operative, has refused to discuss it.

Appointed by Brown to the DNC executive committee in 1989, Tom is closely associated with Yee and Huang.

Huang, Hsia, Yee and the Lums have all retained lawyers. All but Yee declined comment on this story or could not be reached.

“The purpose of the trip was to meet with Taiwanese officials on policy issues,” Yee said through her attorney.

“We were hosted by the Taiwanese government. We met with many ministers and key government officials as well as opposition leaders and business people.”

Hsia’s attorney, Gordon Greenberg, has said: “She has done nothing illegal or improper.”

In addition to the Lippo events, the Hong Kong schedule included a meeting with the U.S. consul general, the Hong Kong governor and the chairman of a trade development council.

In Hawaii, Brown was to meet with then-Gov. John Waihee.

Brown was eager to make in-roads in the emerging Asian American community, both electorally and for fund-raising purposes, former aides say.

“He understood instinctively the invaluable role [Asian Pacific Americans] could play in bridging the gap between the Pacific Rim countries and the U.S.,” Tom wrote in a 1996 column in AsianWeek magazine eulogizing Brown. On the trip to Asia, “he wanted to demonstrate to the Taiwan government the role of APAs in the party.”

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He was also intrigued by the Riady family--which controls Lippo--and their money, sources said. James Riady, scion of the wealthy Indonesian family, became friends with Clinton when Riady’s family invested in a bank in Little Rock, Ark., in the 1980s.

Riady, Huang and Hsia had raised funds for Democratic Senate campaigns and, in turn, had aggressively sought to have senators visit Asia, at least in part to further their business interests. Riady, for instance, wanted senators to lobby the Taiwan government to ease its banking rules so the Riady-owned Bank of Trade could open an office there, according to a Riady memo.

In 1992, after Clinton won his party’s presidential nomination, Huang, Riady, other Lippo executives and Riady-run companies began contributing to the DNC. By election day, Lippo-related DNC donations totaled $131,800; by the end of Clinton’s 1996 campaign, that figure was $854,300.

With a boost from Riady and the White House, Huang joined Brown’s Commerce Department in July 1994. In late 1995, he became a DNC fund-raiser, bringing in $3.4 million--nearly half of which has been returned as illegal or suspect.

The Lums, meanwhile, were introduced to Brown during the 1991 trip by his son, Michael, sources said. Five days after the Lums-Brown lunch, the DNC recorded eight contributions from Hawaii totaling $38,000; $10,000 was from Nora Lum.

The Lums soon relocated to Southern California, where, with Yee’s and Huang’s participation and Brown’s support, they launched a fund-raising group called the Asian Pacific Advisory Council of the DNC.

Brown later appointed Yee as a special assistant at the Commerce Department. She helped arrange his foreign trade missions, which critics have charged were used to reward and court Democratic donors. Yee is now an aide to San Francisco Mayor Willie Brown.

Staff writers K. Connie Kang and William C. Rempel in Los Angeles, Mark Gladstone in Sacramento and researcher Robin Cochran in Washington contributed to this story.