State Treasurer Linked to Asian Funds, Records Show

State Treasurer Matt Fong has distanced himself from political contributions by an Indonesian entrepreneur with extensive ties to China, but records show that the Republican politician was instrumental in raising $150,000 from the businessman and his family--and that Fong’s wife personally benefited from a portion of the money collected.

Fong, for example, has told investigators that he did not solicit a $50,000 contribution from businessman Ted Sioeng’s family for a controversial Republican think tank in 1995 and did not know about the donation until he later read about it in news accounts.

Documents and interviews show, however, that the Sioeng family was approached at Fong’s suggestion and Fong spoke to family members about making a contribution. In addition, a close Fong associate picked up the check, and Fong’s wife received several thousand dollars from the think tank in connection with the donation.

Sioeng, who is barred by federal law from contributing to U.S. political campaigns, has emerged as a central figure in the national fund-raising scandal and is under criminal investigation. He has remained overseas since the probe began more than a year ago.

Senate investigators have found that more than half of the $400,000 that Sioeng’s family, their businesses and associates contributed to the Democratic National Committee in 1996 was transferred from several Hong Kong-based firms.

But investigators also have focused on Fong, a U.S. Senate candidate who is the most prominent Republican elected official to receive large, questionable contributions.

Fong Hopes to Challenge Boxer

Fong, who hopes to become his party’s challenger to Democratic Sen. Barbara Boxer in the fall, has repeatedly denied wrongdoing in connection with contributions that Sioeng and his family made to him and others in 1995. And last year, Fong quickly returned $100,000 from his state campaign committee--including $50,000 from Sioeng himself--after reports linked Sioeng to the Chinese government.

“I had no reason to believe that, after Ted Sioeng and his family were told what the rules were, that they would violate them,” Fong said in an interview.

Fong’s disavowals are now coming under fire as the fund-raising controversy, which primarily has centered on President Clinton’s 1996 reelection campaign, threatens to become an issue in the Senate race.

Last September, in a sworn deposition before Senate investigators, Fong denied knowing that Sioeng himself had given him two contributions totaling $50,000 in April 1995. But Fong acknowledged that he had personally solicited Sioeng, told him how the checks should be filled out and collected at least one directly from the wealthy Indonesian.

Since the two checks bore Sioeng’s Chinese name, Sioeng San Wong, Fong explained that he thought the donor was the businessman’s son or son-in-law, not Sioeng himself.

Democrats on the Senate Governmental Affairs Committee called Fong’s denial “unpersuasive” in a draft report on campaign finance abuses. They concluded that Fong “had every reason to suspect” that the $50,000 came “from an individual not eligible to contribute to his campaign.”

The report, which is to be finalized and released shortly, suggests that Fong may be vulnerable to charges that, in a rush to eradicate a sizable debt from his 1994 treasurer’s race and to curry favor with other Republicans, he ignored obvious signs that Sioeng’s contributions were illegal.

A House committee investigating campaign finance excesses also is examining Fong’s dealings with Sioeng. And Fong has been questioned by FBI agents, who he said assured him that he is not a target.

Fong has said that as a candidate without a fortune of his own he has no choice but to spend considerable energy raising money.

But he told Senate investigators that he advised Sioeng and his family more than once that foreign contributions were illegal.

That assertion is denied by the family’s attorneys, who also say that Sioeng contributed only after Fong had “pestered” him and his relatives and “assured [him] that the payments were proper.”

” . . . Ted Sioeng and his family relied on the assurances given to them by Mr. Fong who, at the time, served as a constitutional officer of the state of California,” said attorney Mark J. MacDougall, who is representing Sioeng and his family.

MacDougall said the donations from Sioeng’s daughter, Los Angeles businesswoman Jessica Elnitiarta, and her companies to Fong and the DNC were legal. He said the family routinely transferred funds from business and personal accounts in Hong Kong. And he denied that Sioeng ever acted on behalf of the government of China.

Family Has Business Throughout S.E. Asia

Sioeng’s family has businesses throughout Asia, as well as extensive U.S. holdings, including the Metropolitan Hotel in Los Angeles, distribution rights for a popular Chinese brand of cigarettes and a pro-Beijing Chinese-language newspaper in Monterey Park.

Although not a permanent U.S. resident, Sioeng’s generosity to local causes is renowned within the Asian community in Southern California.

Fong told Senate investigators he was first introduced to Sioeng and his family in 1988 at a Republican rally for Asian Americans by Julia Wu, a Los Angeles Community College District board member. Fong frequently encountered Sioeng and his family at traditional Chinese events.

Elnitiarta contributed $2,000 to attend a fund-raiser for Fong’s 1994 campaign for treasurer, which ended up $300,000 in debt.

One of Fong’s biggest contributors was Stockton developer Alex Spanos, the owner of the San Diego Chargers. He contributed $100,000 and, according to Fong, issued a challenge: If a Greek American like Spanos could give $100,000, so could Chinese Americans.

Fong told Senate investigators he used the Spanos contribution like a gauntlet to stimulate contributions from Asian donors, including Sioeng and his daughter.

By early 1995, Fong won a commitment from the Sioengs to help eliminate his campaign deficit. That April, he said, he showed up at Sioeng’s office to collect.

According to Fong, Sioeng went to the back part of his office and returned with a check for $20,000 to “Matt Fong for Treasurer.” A second check for $30,000, Fong told investigators, was subsequently delivered to his campaign.

Fong told investigators he believed the checks were from other members of Sioeng’s family--several of whom are legal U.S. residents.

Fong said he thought the name on both checks--Sioeng San Wong--was that of Sioeng’s son or son-in-law, not Sioeng.

Politeness, Fong said, made it difficult for him to admit to Sioeng that he did not recognize the name on the checks.

However, sources close to Sioeng say there is no doubt that the two donations were from the Indonesian businessman’s personal account, because Sioeng wrote both checks in front of Fong and the treasurer told him how to make them out. These sources said Sioeng, who speaks little English, dated the second check a week later so that he could replenish the account to cover the amount.

Fong acknowledged to the Senate committee staff that a notation in his wife’s handwriting was attached to copies of the checks in campaign records. The documents appear to clearly identify the donor as “Dr. Ted Sioeng.”

Fong said the annotation listed the individual who was to be thanked as well as the name of the contributor. “We sent thank-you letters to the person who was responsible--the patriarch of the family,” Fong said of Ted Sioeng.

Sioeng Invited to Meeting With Gingrich

The Senate minority report concluded that even if the checks were from a relative and not Sioeng himself--as Fong said he believed--”a reasonable person would question whether Sioeng was directing a family member to make contributions--a practice prohibited by law.”

Later in 1995, Fong invited Sioeng to join him in Washington for a meeting with House Speaker Newt Gingrich (R-Ga.), explaining that Gingrich was “an important guy in Washington” and that Republicans were trying to reach out to the Asian American community.

Sioeng, accompanied by his son-in-law, met with Fong and Gingrich on July 12, 1995, in the speaker’s Capitol office for a 15-minute session that included posing for a photo and touring the office.

After the meeting, Stephen M. Kinney, a Fong pollster and fund-raiser with ties to Gingrich, asked Fong if the Sioeng family might provide financial support for the speaker’s activities. Fong said that he told Kinney to go ahead and ask.

A week later, Gingrich made a swing through California to raise money for several Republican campaign committees and the National Policy Forum, a Republican think tank.

Kinney made arrangements for the trip--joining forces with Fong’s wife, Paula, who had been employed by her husband’s campaign committee to reduce his campaign deficit. (Fong committee records show Mrs. Fong received $20,000 in the first four months of 1995.)

Kinney said in an interview that, working from a list of prominent Asian Americans provided by Matt Fong, he set up a reception for Gingrich at a Beverly Hills hotel. And Sioeng sat in a place of honor next to Gingrich.

The day before the event, Kinney said, he had gone to the Sioeng family’s Metropolitan Hotel to pick up the $50,000 check for the NPF.

The money was drawn on the account of Sioeng’s Panda Industries by Elnitiarta, who serves as president. And the day the check was written, Sioeng wrote a $50,000 check from his personal account to Panda Industries, Senate investigators found.

Sources close to the Sioeng family say that Matt Fong called ahead of time to let her know that Kinney would pick up the check.

But Fong told investigators that he had no direct knowledge of the payment--and was surprised when he first read about the amount in a 1997 newspaper or magazine article.

Fong said Sioeng or Elnitiarta did ask him whether it was a good idea to contribute to one of Gingrich’s favorite causes. Fong said he replied: “The speaker is a friend, and supporting the speaker on my behalf is a good idea.”

Said MacDougall, the Sioeng family attorney: “Matt Fong was the moving force in the solicitation of that contribution. They were giving because Matt Fong asked them to.”

Fong’s Wife Paid $6,500 by NPF

In interviews, Fong and Kinney said that neither Fong nor his wife was involved in arranging or collecting the contribution. “I had no role to play in it,” said Fong.

But records show that Fong’s wife was paid $6,500 by the NPF a month after Panda Industries donated the $50,000.

“Everyone was certainly surprised to learn that Matt Fong’s wife had personally profited from Panda Industries’ contribution,” said MacDougall.

Kinney explained the payment as a part of his business arrangement with Paula Fong:

The payment to her represented 10% of $65,000 that Kinney raised for the NPF from Elnitiarta and two other sources during Gingrich’s California trip. And the $6,500 was part of the $10,000 to $12,000 that she received for her fund-raising work on the trip.

Kinney said Paula Fong was surprised to receive the check from the National Policy Forum and called him to ask what the group was.

Paula Fong was not available for comment, but Matt Fong said the payment was proper. He said he learned about the NPF check to his wife several months later when filling out his 1995 statement of economic interest. He reported that she received $1,000 to $10,000 from NPF.

Under state law, it is legal for spouses of candidates to work for their campaigns. But an Internal Revenue Service spokesman said companies may create tax problems if they pay individuals for work they did not perform.

Shortly before a 1995 international badminton tournament co-sponsored by Sioeng, his daughter asked Fong to arrange a congratulatory letter from Gingrich for the Pomona event. After Fong asked for a political contribution, Elnitiarta donated a $50,000 check that December from Panda Estates Investment Inc., another Sioeng family company.

Elnitiarta told Senate investigators last year that she gave the money “in appreciation” for the Gingrich letter. But Fong said there was no connection between the contribution and the letter.

Bank records obtained by Senate investigators show that the day Elnitiarta wrote the check, Panda Estates Investment Inc. had only $14,000 in its account. They said a sequence of $50,000 bank transfers during that period suggests that Sioeng may have been the actual source of the donation. His lawyers deny this was the case.

Jacobs reported from Sacramento and Miller from Washington.

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Payment to the Treasurer’s Wife

Paula Fong, the wife of state Treasurer Matt Fong, received a $6,500 commission from a Republican-oriented think tank, National Policy Forum, related to her work raising funds for Republicans. This payment stemmed largely from a $50,000 contribution to the group from a family business of Indonesian entrepreneur Ted Sioeng, a major figure in the Democratic fund-raising scandal.