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By Fred Wertheimer
 
Washington Post
Sunday, August 10, 1997; Page C07
 
 
The Senate campaign finance hearings that paused a week
ago for the August recess have been marked by a swirl of
partisan battles, conflicting agendas and nonstop
political spin.
 
They have also taught us a valuable lesson for the
future.
 
There is no way to stop foreign interests from injecting
campaign contributions of $100,000 or $1 million or more
into our national elections.
 
No way, that is, unless we shut down the political party
"soft money" system.
 
The hearings have established that the soft money system
is the pipeline through which huge foreign contributions
come into our elections. As a practical matter, these
foreign-based donations, given in the name of U.S.-based
donors, cannot be segregated from domestic soft money
contributions.
 
The lesson comes as the battle over ending the soft
money system of unregulated contributions to political
parties is headed for a Senate floor fight next month.
 
For supporters of the soft money ban, the millions of
dollars in foreign contributions laundered into the 1996
elections represent a relatively small portion of the
$250 million in unlimited soft money contributions that
are corrupting the political process.
 
Opponents of the ban, however, see foreign contributions
as the only serious campaign finance problem to come out
of the last election and argue we just need to stop
foreign money from coming into our elections in the
future.
 
Sorry, the hearings now tell us. We can't do that.
 
In order to understand why, let's look at just three
examples where powerful evidence exists that foreign
money was able to enter our political system disguised
as soft money contributions from U.S.-based donors.
 
Exhibit 1. Charlie Trie. An FBI investigator, working
for the Senate committee, testified that Trie, an
American citizen and Clinton/DNC fund-raiser, had
laundered foreign contributions on behalf of his
"business partner," Ng Lap Seng, a Macao real estate
tycoon, in contributing $220,000 to the DNC. The FBI
investigator pointed to more than $900,000 that had been
wired to Trie from Ng and used, in part, to pay for
Trie's soft money contributions to the DNC.
 
Ng, we recently learned, got to visit the White House on
a dozen occasions, from June 1994 to October 1996, and
enjoyed a rare opportunity to be a guest at a dinner
held in the president's personal residence.
 
Exhibit 2. Johnny Chung. Chung, an American citizen,
gave a $50,000 soft money contribution, made out to the
DNC, to a White House staff member. It was part of his
efforts, Chung has said, to obtain White House access
and VIP treatment for five Chinese businessmen. A DNC
official, who earlier had turned down the contribution,
testified, "I had a sense that he might be taking money
from them . . . and then giving it to us."
 
Chung reportedly received a $150,000 wire transfer from
the Bank of China shortly before he made the soft money
contribution.
 
The Chinese businessmen got their White House access and
VIP treatment.
 
Chung, who contributed $366,000 to the DNC between
December 1994 and September 1996, and visited the White
House dozens of times, recently said, in a bid for the
sound bite Hall Of Fame, "I see the White House is like
a subway -- you have to put in coins to open the gates."
The DNC recently returned Chung's $366,000 because,
according to a DNC audit, it was not able to confirm the
money actually came from Chung.
 
Exhibit 3. Ambrose Young. Young, a Hong Kong
businessman, funded a loan guarantee for a $2.1 million
loan made to the National Policy Forum, a Republican
Party arm founded and headed by then-RNC Chairman Haley
Barbour. Young funded the guarantee by transferring
money from his Hong Kong company to a U.S. subsidiary of
the company, which then used the money to guarantee the
loan received by the Policy Forum.
 
The Policy Forum, in turn, transferred the bulk of the
$2.1 million loan it received to the RNC, which used the
foreign-sponsored funds to make soft money expenditures
in connection with the 1994 congressional races.
 
Barbour's claim that he did not know foreign funds were
used for the loan guarantee was directly challenged in
testimony and depositions from at least four other
individuals, including former RNC head Richard Richards,
and Young, who stated that Barbour was told the funds he
wanted would come from a foreign source.
 
The only reason we know the details of how these
contributions and numerous other foreign donations were
laundered into our national elections is that an
unprecedented campaign finance investigation is being
conducted into the unprecedented campaign finance
scandal that occurred last year.
 
As a result, investigators and subpoena power have been
available to examine bank accounts, trace wired funds
and track down the true sources of contributions. Even
so we still have not been able to pin down just how much
foreign money came in as soft money during the 1996
elections.
 
Unless one assumes that massive campaign finance
investigations will occur every two years, following our
national elections, there will be no way to get behind
the soft money contributions being made to determine if,
and when, a $100,000 or $1 million contribution from an
American source, in fact, has been funded by foreign
interests.
 
Absent a soft money ban, furthermore, this is likely to
be a growth industry.
 
The global economy, the growing interrelationship
between American and foreign business interests and the
growing importance of U.S. economic decisions around the
world are only going to increase the desire of foreign
interests to play by Washington rules and invest big
money in American politicians.
 
Campaign finance laws already ban many of the foreign
money abuses that occurred, in prohibiting contributions
from foreign individuals, companies and countries, and
contributions disguised in the name of others. This did
not stop the practices.
 
Even if Congress were to tighten the laws by banning
contributions from foreign nationals residing in the
United States and from U.S. subsidiaries of foreign
companies, the soft money pipeline would remain wide
open for unlimited foreign contributions to continue
coming in disguised as contributions from American
sources.
 
We have known for some time that the political party
soft money system is a vehicle U.S. corporations, labor
unions and wealthy citizens use to evade the nation's
campaign finance laws. We now know it is a vehicle for
foreign interests to do this as well.
 
When it comes to foreign contributions, we face a simple
and stark choice. Ban soft money and stop the foreign
contributions. Or allow soft money, and with it, allow
foreign contributions to grow and prosper in American
politics.
 
The writer is president of Democracy 21, a public
affairs group.
 
     © Copyright 1997 The Washington Post Company