1997 Special Investigation in Connection with 1996 Federal Election Campaigns. United States Senate Committee
by the Committee on Governmental Affairs. 9 See Amendment No. 22, as modified. 143 Congressional Record S2097 (daily ed. March 11, 1997). 10 See 143 Congressional Record S2109 (daily ed. March 11, 1997). 11 Id. at S2114. 12 Id. at S2125. 13 See S.Res. 89. 143 Congressional Record S4915 (daily ed. May 21, 1997). 14 The DNC even attempted to protect information by asserting the attorney-client privilege both over document production and in depositions based on discussions between the DNC witnesses and White House officials, including White House lawyers. In a June 6, 1997 order, Chairman Thompson overruled the assertion of the attorney-client privilege as to discussions between DNC officials and White House lawyers. 15 The Committee sought permission to send staff to the People’s Republic of China (PRC) to interview witnesses there, but the PRC refused to issue visas to Committee staff for the purpose of conducting fact-gathering within the PRC. Accordingly, no staff traveled to the PRC. 16 The investigation into the Teamsters has broadened and media reports indicate that the second-ranking figure of the AFL-CIO, Richard Trumka, has invoked his Fifth Amendment right against self-incrimination in response to the grand jury. Trumka simply ignored a Committee subpoena seeking his deposition testimony, and the reason for that is now obvious: he wanted to delay the embarrassment to organized labor of having one of its most senior officials assert his Fifth Amendment rights. 17 The Committee heard from 70 different witnesses; two witnesses appeared twice. 18 Although investigative hearings on the political activities of non-profit groups were not held, the activities of some of these groups were outlined during the Committee’s policy hearings in September.
SUMMARY OF FINDINGS
Background and Context
On November 8, 1994, Americans shifted control of both houses of Congress to the Republican Party for the first time in 40 years. For a time, the election rendered President Clinton so weak in the polls that many experts questioned his “relevance,” suggesting that he might face a primary challenge as he attempted to secure his re-election in 1996. The election results spurred great concern among the President’s supporters that he might suffer a similarly disastrous defeat in 1996.
In early 1995, the President began meeting with his closest advisors to develop a plan to ensure his re-election by “pulling out all the stops”1 in campaign fundraising. At this time, in an atmosphere of abject political desperation, the seeds were sown which would later grow into the DNC’s variegated fundraising scandals of 1996. The President and his advisors determined that the key to their success in the 1996 elections would be to wage immediately a massive television political advertising campaign of unprecedented cost.
In the end, of course, their plan was an astonishing success: the Democratic Party raised three times as much money for the 1996 election as it had for the 1992 contest, and President Clinton was re-elected. The President’s success, however, came at a steep price. In the frenzied drive to raise such large amounts of campaign money, the Democratic Party dismantled its own internal vetting procedures, no longer caring, in effect, where its money came from and who was supplying it. Worse, their campaign eviscerated federal fundraising laws and reduced the White House, key Administration offices, and the Presidency itself, to fundraising tools.
This increasingly mercenary approach also led the Democratic Party to view America’s ethnic communities as exploitable “renewable resources” for political fundraising. The DNC’s recklessness in raising money from their community unfairly burdened Asian-Americans with the stigma of lawbreaking by fundraisers such as John Huang, Charlie Trie, and Maria Hsia.
For the U.S. political process as a whole, the DNC and White House’s reckless fundraising disregarded an obvious risk—the danger that powerful foreign nationals, or even governments, would attempt to buy influence through campaign contributions. The result of all this was foreseeable, including: the erosion of safeguards in U.S. election law designed to guard against political corruption, and unprecedented amounts of illegal foreign contributions making their way into Democratic coffers. The Committee uncovered strong circumstantial evidence that the Government of the People’s Republic of China (PRC) was involved in funding, directing, or encouraging some of these foreign contributions.
President Clinton has attempted to distance himself from these scandals by trying to distinguish his own “official” re-election campaign (Clinton/Gore ’96) from the abuses the DNC carried out. Based on the evidence compiled by the Committee, however, this distinction is untenable. Indeed, no one has done more to erode this very distinction than the President himself, who with his staff effectively seized control of DNC operations and ran all Democratic party campaign and fundraising efforts out of the White House. During the 1996 campaign, the DNC was the alter ego of the White House.
Deputy White House Chief of Staff Harold Ickes, for example, ran the DNC on a day-to-day basis and presided over weekly “money meetings” at the White House where he reviewed the DNC’s fundraising and expenditures before passing this information along to the President and the Vice-President. This White House control made the DNC’s national chairman, Don Fowler, in effect, subservient to Ickes. The Clinton/Gore and DNC advertising campaigns were also virtually inseparable, constituting a seamless web of White House-directed campaigning that employed all the same consultants, pollsters, and media producers. Ultimately, in fact, the President himself exercised total control over the DNC advertising. Having reduced the DNC into an arm of the White House, President Clinton and Vice President Gore are responsible for the actions it undertook in their names and at their direction.
Late in the 1996 presidential campaign, public reports surfaced about foreign donations to the Democratic Party and the DNC’s improper provision of White House access to well-heeled foreign nationals. The White House succeeded in preventing the bubbling scandal from derailing the President’s re-election, but these efforts could not prevent an ever more complex tale of campaign lawbreaking from coming to light, thus sparking an ongoing series of Congressional and criminal investigations that have so far involved the White House, the DNC, several government agencies, hundreds of witnesses, and several foreign countries. After the November 1996 elections, the U.S. Senate determined to investigate allegations of campaign finance wrongdoing. The resolution authorizing the investigation contained a significant flaw, however -- a deadline set only nine months after the start of the investigation.
The imposition of the December 31, 1997 deadline virtually invited witnesses to engage in obstructive tactics, perhaps none more so than the DNC and the White House. This obstruction, combined with the sheer complexity of the investigation, made this deadline the single greatest obstacle faced by the Committee’s inquiry. Moreover, more than 45 witnesses either fled the country or refused to cooperate by citing their Fifth Amendment privilege against self incrimination. Despite the Committee’s request for help, President Clinton took no action whatsoever to persuade such individuals to cooperate. Nevertheless, the Committee was able to answer many important questions and to uncover evidence that strongly suggests answers to others. The following pages summarize the major findings of this inquiry.
The DNC Raised Millions of Dollars in Illegal Foreign Funds
Following the 1996 election, and in the wake of the growing DNC fundraising controversy, the DNC was ultimately forced to return $2,825,600 in illegal or improper donations.2 Of this total amount, almost 80 percent was either raised or contributed by two men—John Huang and Charlie Trie. Strikingly, both men were longtime friends of President Clinton, and both were in positions to raise large campaign contributions because of their personal relationships with the President. Accordingly, the Committee began its hearings by focusing significant attention on Huang and Trie, hoping to answer two interrelated questions: what did President Clinton and his top aides know about their illegal fundraising activities, and why was nothing done to curb those activities. This particular inquiry faced significant obstacles because Trie fled to China soon after the controversy arose,3 Huang invoked the Fifth Amendment and refused to cooperate with the Committee, and the President declined the Committee’s invitation to testify. Despite these obstacles, the evidence strongly suggests that, at a minimum, the White