SPOT NEWS 11-01-96 (1)
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Compiled: Friday, November 1, 1996
by SPOT NEWS
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-- Middleton Denies Seeking Taiwan Donation
-- Two Huangs Linked To White House
-- Wood, Middleton Urged Taipei To Drop Lobbyist
-- FDIC Dropped Investigation Into Lippo Bank
-- Clinton Touts Campaign Finance Reform
-- Navy Releases Boorda Report
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Middleton Denies Seeking Taiwan Donation
Former White House staffer strongly rejects claim that
he sought $15 million from Taipei ruling party for Clinton
campaign.
By SARA FRITZ, RICHARD A. SERRANO,
Los Angeles Times 11-01-96
WASHINGTON--A former White House aide Thursday
strongly denied reports that he had solicited $15 million
from Taiwan's ruling party for President Clinton's
reelection campaign.
Mark E. Middleton issued a statement denouncing as
false the allegations made by a Taipei public relations
consultant who claims to have been present when
Middleton arranged to receive $15 million for Clinton
from Liu Tai-Ying, chief financial officer of the
Kuomintang Party. Liu also has denied the charge.
Middleton, 34, is an Arkansan who previously worked as
an aide to White House senior aide Thomas "Mack"
McLarty and who has been working as an international
relations consultant since leaving the White House in
February 1995.
In his statement, Middleton said that he had been to
Taiwan several times on business. But he carefully
contradicted nearly every other element in the account
of an August 1995 meeting provided by the public
relations consultant, C.P. Chen. Chen, who originally
spoke on background but later stepped forward with his
charges, said he attended a meeting between Liu and
Middleton in Taipei.
"While I was in Taiwan," Middleton said, "I never
represented that I was a current White House employee,
never stated or implied that I was attempting to raise
funds for the DNC [Democratic National Committee] or
for any candidate, and never accepted or arranged any
contributions to the DNC or to any candidate from any
foreign source."
Middleton did not make any reference to whether or not
he had met with Liu in Taipei that August. He also did
not say why, as American officials have said, he brought
Liu to a Democratic fund-raiser in San Francisco a
month later.
Chen claims that Middleton solicited funds for the
Clinton campaign from Liu and, in return, that Liu
pledged $15 million to the campaign.
But there is no evidence that Liu made any such
donation, which would be illegal under various U.S.
laws, including those placing limits on campaign
contributions and others governing contributions from
foreign sources.
The meeting between Liu and Clinton came at a
delicate time for Taiwan, which has not enjoyed formal
diplomatic relations with the United States since 1979.
The country's political leaders have invested heavily
over the years to lobby through whatever channels they
could to win closer ties to the United States, which
formally recognizes Taiwan's enemy, mainland China.
In late 1995, Taiwan was preparing for its first
presidential elections the following spring.
Middleton acknowledged in his statement Thursday that
he is "acquainted with" two other men who also have
been accused of improperly soliciting campaign funds
from Taiwanese and other Asian sources.
Those two men are John Huang, a former Commerce
Department official who has been the chief Democratic
Party fund-raiser for Asian Americans, and James C.
Wood, who heads the American Institute for Taiwan, the
U.S. government-funded agency that handles diplomacy
with Taipei.
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Two Huangs Linked To White House
By PETE YOST
Associated Press 11-01-96
WASHINGTON -- There were two people named John
Huang visiting the White House, a presidential
spokesman said Friday amid the controversy over
foreign-linked political donations.
White House spokesman Barry Toiv said that ``a
number'' of the 65 visits this year by a man named John
Huang to the White House were by someone other than
the John Huang who was raising money for the
Democratic National Committee.
Toiv identified the second man with the same name as
being involved in Vice President Al Gore's review of
government agencies.
The White House learned of the second man with the
same name on Thursday after talking with some of the
people who were listed as having cleared John Huang
into the White House, Toiv said.
Toiv's statement confirms that the White House has
compiled a list of who the DNC fund-raiser met with. The
White House has refused to share the names with
reporters. A congressional committee is demanding that
the names of people the DNC fund-raiser met with be
turned over by noon Friday.
Secret Service logs which surfaced earlier this week
show that someone with the name John Huang visited
the White House 65 times this year -- but the logs don't
show who Huang met with. Reporters for several days
have been asking the White House for details of who
Huang met with.
But on Thursday, the White House provided just two
names.
White House spokesman Mike McCurry said that top
Clinton political aide Harold Ickes recalls meeting with
Huang ``at least once or twice.''
The only other person McCurry suggested as possibly
having met with Huang was Douglas Sosnik, assistant to
the president and director of political affairs. But Sosnik
said that ``I don't recall meeting with'' Huang at the
White House.
Ickes is deputy White House chief of staff and one of
Clinton's most trusted political advisers.
Newly disclosed records show Huang -- at the center of a
growing controversy over foreign-linked political
donations -- was a far more frequent White House visitor
than the Clinton administration has said.
The White House previously acknowledged that Huang --
who pulled in an estimated $4 million to $5 million from
Asian Americans this year -- met on a few occasions
with the president.
Rep. William Clinger, R-Pa., chairman of the House
Government Reform and Oversight Committee,
demanded that the Clinton administration surrender by
noon Friday computer records identifying whom Huang
went to see.
Huang recently was stripped of his fund-raising duties by
the Democratic National Committee. The committee has
returned some contested donations. Huang remains on
the party's payroll.
On Thursday, a federal judge granted Huang's attorneys'
request to terminate questioning of him in a civil suit
brought by a conservative advocacy group against the
Commerce Department.
Also Thursday, Attorney General Janet Reno said the
Justice Department's criminal division is reviewing
allegations, made by a group of Republican
congressional leaders, about Democratic fund raising to
see whether they need to be investigated.
The lawmakers have asked Reno to seek appointment of
an independent counsel to investigate the broader area
of Democratic Party fund raising, including allegations
of illegal contributions from foreign individuals and
companies.
Huang's meetings at the White House could ``raise
questions about the connection between policy-making
and fund-raising'' and ``about whether the public trust is
being protected,'' said Kathleen Clark, a professor at
Washington University Law School in St. Louis, who
specializes in ethics.
But McCurry said, ``We have no indications that there
was anything improper.
``It would have been common'' for Huang ``as part of his
role as a fund-raiser and someone working on Asian
American outreach to participate in a lot of scheduling
meetings or planning sessions related to how we were
going to use the president's time on a calendar,'' said
McCurry.
Secret Service logs show that Huang went to the
executive mansion at least 65 times this year, often for
hours at a time. He made 78 trips to the White House in
all in the past 15 months.
The logs show Huang was at the White House for eight
consecutive days last February, including a visit of more
than five hours on Sunday, Feb. 11. Huang also went to
the White House on Saturday, Feb. 10. Huang was at the
White House 21 times in February.
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Wood, Middleton Urged Taipei To Drop Lobbyist
By MARCUS W. BRAUCHLI
Wall Street Journal 11-01-96
TAIPEI, Taiwan -- The chief U.S. representative to
Taiwan and a former White House aide pressured Taipei
to break its ties with a Washington lobbying firm that led
last year's successful Capitol Hill crusade to win a
U.S. visa for Taiwan President Lee Teng-hui, Taiwanese
familiar with the matter say.
In the year after Mr. Lee's controversial June 1995 visit,
James C. Wood Jr., chairman of the quasi-official
American Institute in Taiwan, and Mark
E. Middleton, a former aide and Democratic Party
operative, separately told Taiwan leaders that the
lobbying firm, Cassidy & Associates, was an
obstacle to smooth relations between the Clinton
Administration and the government of Taiwan, people
present at those meetings say.
Both men suggested alternatives to Cassidy, with Mr.
Middleton offering his own services, according to the
people familiar with the discussions. In any event,
Cassidy & Associates remains on Taiwan's payroll, and a
spokesman in Washington says the firm knows nothing
of Mr. Middleton's alleged efforts in Taiwan to displace
it.
Through a spokeswoman, Mr. Middleton denied having
"any conversations involving the hiring or nonhiring of
the Cassidy firm." White House press secretary Michael
McCurry said, "I can say categorically that neither the
president or the White House would have directed
anyone to suggest that the U.S. or the White House had
a preference about private-sector representation for
Taiwan."
The determination and opportunism Mr. Wood and Mr.
Middleton, both Arkansas lawyers and friends of
President Clinton, appear to have exhibited
in Taiwan already has sparked a political furor. The
Justice Department is investigating whether Mr. Wood
improperly sought political contributions for Mr. Clinton
in Taiwan, and Mr. Middleton has been accused of
asking Taiwanese who aren't residents of the U.S. for
donations to the Democratic Party. Under U.S. law, only
American citizens and residents, or companies
with active U.S. operations may make political
donations. Mr. Middleton's spokeswoman said Mr.
Middleton also denies involvement in any improper
fundraising and said he had "never accepted or
arranged" any contributions to the Democratic National
Committee or U.S. candidates from a foreign
source.
It now appears that the most dramatic of the Taiwan
meetings, between Mr. Middleton and Liu Tai-ying, a top
powerbroker of Taiwan's ruling Kuomintang, or
Nationalist Party, was centered on Mr. Middleton's hopes
to displace Cassidy & Associates. In that Aug. 1, 1995,
meeting, according to Chen Chao-ping, a political
consultant here who helped set it up, Mr. Liu offered $15
million to help President Clinton.
Mr. Liu confirms that he attended the meeting, held at
the KMT-backed investment company he heads, but
denies offering or being asked for political contributions
by Mr. Middleton. There are no indications the $15
million was ever disbursed. The subject of political
donations came up in the context of a discussion over
Cassidy, and how Mr. Middleton might be able to
supplant the firm, says Mr. Chen, who says he was at the
meeting.
At the time of the meeting, the Taiwan lobby was very
much on Washington's mind. Less than two months
before, the White House, under intense pressure from
Congress, reversed a 16-year-old policy and granted
Mr. Lee a visa for June 1995. His visit exacerbated
frictions that led China to stage nine months of sporadic
military maneuvers to remind Taiwan's 21 million
people of its claim to the island.
Mr. Middleton asked to meet Mr. Liu after learning that
Mr. Liu was responsible for hiring Cassidy at $125,000 a
month, Mr. Chen said. "That was his main mission, to
terminate the contract with Cassidy & Associates," Mr.
Chen said.
At the meeting, according to both Mr. Chen and Mr. Liu's
spokeswoman, Mr. Middleton offered to establish a
channel of communication between Taiwan's leaders
and President Clinton. On Sept. 27, 1995, he delivered:
Mr. Liu got a brief, private meeting with the president.
Mr. Wood's resolve to get rid of Cassidy was on display
after his appointment last December as chairman of AIT,
the de facto U.S. embassy here. In meetings with
Taiwan officials, including President Lee, Mr. Wood
voiced what he said was the White House's annoyance
with Cassidy and suggested the firm be replaced,
people at the meetings said.
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FDIC Dropped Investigation Into Lippo Bank
Scripps Howard 11-01-96
WASHINGTON -- Federal bank regulators earlier this
month dropped a six-year-long investigation into Lippo
Bank, which is at the center of a furor over Indonesian
campaign gifts to the Democratic Party.
Officials at the Federal Deposit Insurance Corp. (FDIC)
said the probe was supposed to have ended in 1994, but
was kept open for an additional two years because of
what bank regulators now say was a
mistake.
"Nobody knows what happened," said FDIC spokesman
Bob Gerrson.
A separate investigation of money laundering at Lippo
Bank's Los Angeles branch was ended in March. The
bank, part of a huge conglomerate, is the largest in
Indonesia and has branches in Hong Kong, China and
the United States.
FDIC documents show that a May 1990, audit uncovered
several serious banking law irregularities at the Los
Angeles branch, sparking an official investigation by
bank regulators.
In December 1990, the FDIC charged Lippo was
operating with insufficient capital, following "hazardous
and lax collection practices" on its loans, operating with
inadequate reserves, keeping low-quality loans on its
books, and operating in a manner to produce
losses.
Four years later, Lippo signed a consent agreement with
FDIC agreeing to correct problems while neither
admitting nor denying the 1990 charges.
But the FDIC kept the investigation open until Oct. 10,
1996, when FDIC regional director George Masa told
Lippo Bank in a letter that the investigation was
concluded. In the letter, Masa apologized that
bank regulators "inadvertently failed to issue the
appropriate legal documents" to close the case earlier.
FDIC Chairman Ricki Helfer, a longtime friend of
President Clinton's, issued a statement Thursday saying
she did not participate in any Lippo matters because she
wanted to avoid "even the appearance of
conflict of interest."
FDIC spokesman Gersson said "it was mistake" that the
FDIC didn't officially end the investigation in 1994, when
the consent decree was signed.
"No one noticed this until it (Lippo) was in the news this
year," Gersson said. "It's an awkward time to be doing
it."
Sen. Lauch Faircloth, R-N.C., questioned the timing of
the FDIC's move, noting that Lippo has emerged at the
center of Republican-fueled investigations of John
Huang, a Democratic fund-raiser who served as
a vice chairman of Lippo Bank from 1990 until 1994,
when he left to become a Clinton administration
appointee in the Commerce Department's trade division.
Huang left Commerce last December to join the
Democratic National Committee, where he spearheaded
an effort to raise funds in the Asian community. Several
of these contributions have been traced back
to associates of James Riady, the Indonesian tycoon
who heads the Lippo banking and real estate empire.
The 1990 FDIC investigation of Lippo was one of two the
agency conducted of the bank, Gersson said.
The second, launched in 1994, involved the failure of the
bank to report transactions of more than $10,000 in
violation of federalmoney-laundering laws; Lippo also
was accused of bias in favor of California's Asian
community and against blacks and Hispanics in the
bank's service area.
Lippo aims its loans primarily at Asians and advertises
almost exclusively in Asian publications.
That second investigation ended March 15, 1996, with
another consent decree in which the bank agreed to
correct the problems.
In a related matter, U.S. District Judge Royce Lamberth
Thursday stopped the tape-recorded deposition of
Huang conducted by the conservative watchdog group
Judicial Watch as part of a suit seeking to determine if
Commerce Department trade missions were used to
raise money for the Democratic Party.
After Huang underwent five hours of face-to-face
questioning by Judicial Watch Tuesday, Lamberth ruled
Huang can answer any further questions the group
might have in writing.
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Clinton Touts Campaign Finance Reform
Reuter 11-01-96
SANTA BARBARA, Calif. - President Clinton, battered by
allegations of improper political fund-raising, Friday
proposed major reform of campaign finance laws
including banning contributions by non-citizens.
Clinton insisted that Democrats had "played by the
rules" in fundraising but called for sweeping changes
that he said have been blocked in the past by his
Republican challenger Bob Dole, a 35-year veteran of
Congress.
Clinton did not deal directly with questions about the
White House ties of senior Democratic fundraiser John
Huang, who reportedly raised a lot of cash from
powerful Asian business interests and enjoyed frequent
White House access.
In his first public remarks on the issue, which appeared
to have dented his lead before Tuesday's election,
Clinton called for voluntary spending limits for
congressional races and endorsed a ban on political
contributions to political parties from foreign
corporations and individuals.
"Everybody knows the problems of campaign money,"
he told a rally in Santa Barbara. "There's too much of it,
it takes too much time to raise and it raises too many
questions."
Clinton echoed a call by Dole for a ban on donations
from non-citizens, saying the essence of American
democracy was that "citizens decide."
Although most polls indicate Clinton still holds a
comfortable lead, a Reuters/Zogby tracking poll
released on Friday said the lead had shrunk to just 5.5
percentage points.
Apart from Dole, Clinton has been criticized by Reform
Party candidate Ross Perot and such bipartisan citizen
interest groups as Common Cause for questionable
fund-raising.
In his speech, Clinton said the Democratic Party raised
$241 million over the past two years and the
Republicans generated $399 million. "Raising that much
money strains the political system," he said. "We have
played by the rules, but I know and you know that it is
time to change the rules."
He attacked Dole for blocking previous reform efforts
including a bill earlier this year. "The Republicans have
been reluctant to give up their access to big money. Led
by my opponent, they filibustered the bill to death,"
Clinton said.
"In fact, campaign finance reform has come before the
Senate six congresses in a row and my opponent
filibustered it five times," he said.
Clinton called for an end to so-called soft money
donations to political parties to help federal candidates,
including those made by corporations and labor unions.
The current controversy centers on these donations,
ostensibly to be used for party-building activities such as
voter registration but in reality a loophole used to aid
presidential candidates without the money counting
against federal spending limits.
Speaking in Ashland, Ohio, Friday, Dole said: "I ask
President Clinton to show he's serious about reform by
accepting four common sense ground rules for a
bipartisan commission."
They were: bans on contributions by non-citizens, on
soft money donations from corporations or labor unions,
on labor unions using member dues for political
campaigns and on so-called political actions committees
(PACs).
In the summer of 1995, Clinton and Republican House
Speaker Newt Gingrich shook hands during a joint
appearance in New Hampshire and pledged to form a
commission to reform campaign finance laws. Clinton
appointed members to the panel a short time later but
Gingrich never did.
In his speech Friday, Clinton also called for voluntary
spending limits by congressional candidates, who would
then be rewarded with free television time instead of
being forced to deal with the "growing expense of
buying 30 second ads."
He said he would work in the next Congress to enact
reform legislation sponsored by Arizona Republican
Sen. John McCain, a key confidant of Dole, and Sen.
Russell Feingold, a Wisconsin Democrat.
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Navy Releases Boorda Report
By SUSANNE M. SCHAFER
Associated Press 11-01-96
WASHINGTON -- The Navy released a report Friday of its
investigation into the suicide of Adm. Jeremy ``Mike''
Boorda, but withheld two notes he wrote shortly before
his death.
The inch-thick report by the Naval Criminal Investigative
Service said Boorda, chief of naval operations,
committed suicide May 16 by shooting himself in the
chest in the study of home. The report makes no
conclusions about a motive for the admiral's suicide.
After Boorda's death, two notes were found side by side
on the desk in his study, said the report.
One was addressed to Boorda's wife, Bettie. The other
was a two-part note addressed to the Navy's chief
information officer, Rear Adm. Kendell Pease, with a
subsection, ``To My Sailors.''
However, the report -- provided in response to a request
filed under the Freedom of Information Act -- did not
release the contents of the notes.
The Navy Department decided not to make the notes
public, a Navy spokesman said. He cited FOIA
exemptions that allow records to be withheld if they
``constitute an unwarranted invasion of personal
privacy,'' among other reasons.
Many other items in the report are blacked out, such as
the autopsy report and the identities of people
interviewed by investigators.
The four-star admiral killed himself the day he was to
have been interviewed by Newsweek magazine about
whether he was entitled to wear Vietnam combat
decorations for valor.
According to a government source who read the notes
shortly after Boorda's death, one of the notes expressed
concern about a possible scandal over the combat
decorations.
The New York Times reported at the time that the notes
suggested Boorda had been driven to take his life by
fear that the reputation of the Navy, already battered by
a series of scandals, would be further harmed by the
disclosures about his medals.
Pease, the Navy information officer, was with Boorda a
little over an hour before the suicide and had scheduled
the admiral's meeting with Newsweek.
Boorda, according to several people interviewed for the
report, had not seemed upset or distraught in discussing
the medals.
``We'll just tell him the truth,'' several individuals quoted
Boorda as saying in regard to the medals.
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