More Questions About Clinton's Asian Donations

Implicated are Indonesian families and businesses with close ties to President Clinton such as the Riady family, which controls the Lippo Group. Although it was also known that the Riadys have substantial business interests in China, no connection between the Administration, China, and the Riadys had been found prior to this.

The story, written by one of the Post's managing editors, Bob Woodward of Watergate fame, and Brian Duffy, also said "the information gives the Justice Department inquiry what is known as a foreign counterintelligence component, elevating the seriousness of the fund-raising controversy, according to some officials."

Spokesman Michael McCurry said that Clinton knew nothing about the story until he had read it in the Post, nor did anyone else in the White House he had talked to.

And besides, McCurry said, he himself couldn't "make heads or tails out of the story" although he never said exactly what was puzzling the president.

Late that afternoon, at a joint appearance with Israeli Prime Minister Benjamin Netanyahu, reporters finally got a chance to ask the president about the Post story. He was not very expansive but apparently no longer puzzled.

"It would be a very serious matter for the United States if any country were to attempt to funnel funds to one of our political parties for any reason whatsover. So I think we have to let the investigation proceed," the president said and dropped the matter.

Chinese Embassy spokesman Yu Shuning described the Post story as "groundless and irresponsible." He called the report "another example of demonizing China."

Woodward and Duffy said that their sources "declined to provide details about the scope of the evidence" but that the inquiry is serious enough that 25 agents are working on it.

The new information may increase the pressure for Attorney General Janet Reno to appoint an independent counsel to investigate the expanding web of possible foreign contributions to the Democractic Party.

Deputy Attorney General Jamie Gorelick, subbing for Reno at a press briefing, said, "The task force has standing instructions that if it finds any information that would lead it to believe that there should be an independent counsel, they are to bring it to our attention immediately and that has not occurred in this case."

Reno in the past has declined requests for an independent counsel, contending that the Justice Department task force can conduct a full and independent inquiry and that there has been no specific and credible allegation of wrongdoing against any of the senior executive branch officials covered by the Independent Counsel Act.

One reason investigators suspect a Chinese connection, Woodward and Duffy wrote, "was the role of John Huang, a former Commerce Department official and DNC fund-raiser now at the center of the campaign controversy."

The Post story said, "Huang was given a top-secret clearance at Commerce after what Republicans have called a lax background investigation... [and through a bureaucratic error] ...Huang retained his top-secret clearance after he left the Commerce Department to become a DNC vice chairman in December 1995."

Woodard and Duffy reported that "during his 18 months at Commerce, Huang was scheduled to attend 37 intelligence briefings, including briefings on China, and saw more than two dozen intelligence reports."

While at the Commerce Department, Huang made more than 70 phone calls to a Lippo-controlled bank in Los Angeles and met three times with Chinese officials, the Post reported.

Most important is "China Resources," a powerful corporation held by the Chinese government. According to a story in the February 14 New York Times, China Resources has "occasionally served as cover for espionage activities by the Chinese government. "

In 1993, Lippo Group sold half of its interest in a Hong Kong bank to the corporation, just weeks after President Clinton renewed China's most-favored-nation status.

John Huang has ties to both the Hong Kong bank, where he had been a vice president, and China Resources. In September 1993, according to the Times, Huang urged Commerce Secretary Ron Brown to meet with the chairman of the corporation.

Besides Lippo, questions of China's influence were raised when Charles Yah Lin Trie, a friend of the President from Arkansas days, brought Wang Jun to a White House reception last February. Wang is a Chinese government weapons dealer whose company was implicated in arms smuggling into the United States. Trie was also appointed to a government post and delivered $640,000 in donations to Clintons' Whitewater legal defense fund. The donations were called improper and returned.

Solomon told Freeh that he was concerned about Huang's access to intelligence information and dozens of calls Huang made from Commerce to the Lippo Group, after leaving the Indonesian conglomerate with a $788,750 golden parachute.

The Lippo Group is also one of the targets of a Senate committee investigating 1996 campaign fund raising.

The panel issued 52 subpoenas on February 13, most of them to members of the Clinton administration and Democratic donors and companies owned by the Lippo Group.

Despite Democratic objections, the Senate Govermental Affairs Committee, chaired by Tennessee Republican Fred Thompson, also supoenaed documents on foreign trade missions led by the late Commerce Secretary Ron Brown. The panel reportedly wants to determine if Huang used his influence to reward large contributors to Democrats with places on Commerce Department trade missions.