<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:58752.wais]
JOHNNY CHUNG: FOREIGN CONNECTIONS, FOREIGN CONTRIBUTIONS
=======================================================================
HEARING
before the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
MAY 11, 1999
__________
Serial No. 106-23
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
58-752 CC WASHINGTON : 1999
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
JOHN T. DOOLITTLE, California (Independent)
HELEN CHENOWETH, Idaho
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on May 11, 1999..................................... 1
Statement of:
Chung, Johnny C.C............................................ 223
Letters, statements, etc., submitted for the record by:
Burton, Hon. Dan, a Representative in Congress from the State
of Indiana:
Information concerning Mr. Chung's bank account.......... 327
Letter dated June 27, 1996............................... 202
Letter dated May 7, 1999................................. 195
Prepared statement of.................................... 204
Responses to interrogatories and subpeonas............... 308
Staff report and compilation of exhibits................. 3
Chung, Johnny C.C., prepared statement of.................... 236
Comstock, Barbara, chief counsel, Committee on Government
Reform:
Exhibit 1................................................ 272
Exhibit 2................................................ 274
Exhibit 3................................................ 276
Exhibit 4................................................ 279
Exhibit 5................................................ 281
Exhibit 6................................................ 285
Exhibit 7................................................ 287
Exhibit 8................................................ 289
Exhibit 9................................................ 294
Exhibit 10............................................... 296
Gilman, Hon. Benjamin, a Representative in Congress from the
State of New York, prepared statement of................... 218
JOHNNY CHUNG: FOREIGN CONNECTIONS, FOREIGN CONTRIBUTIONS
----------
TUESDAY, MAY 11, 1999
House of Representatives,
Committee on Government Reform,
Washington, DC.
The committee met, pursuant to notice, at 12:15 p.m., in
room 2154, Rayburn House Office Building, Hon. Dan Burton
(chairman of the committee) presiding.
Present: Representatives Burton, Gilman, McHugh, Horn,
Mica, McIntosh, Souder, LaTourette, Sanford, Barr, Hutchinson,
Terry, Biggert, Walden, Ryan, Chenoweth, Waxman, Lantos,
Kanjorski, Mink, Maloney, Norton, Kucinich, Tierney, Turner,
and Schakowsky.
Staff present: Kevin Binger, staff dirctor; Barbara
Comstock, chief counsel; David A. Kass, deputy counsel and
parliamentarian; Mark Corallo, director of communications; John
Williams, deputy communications director; Carla J. Martin,
chief clerk; Lisa Smith-Arafune, deputy chief clerk; John
(Timothy) Griffin and Kristi Remington, senior counsels; Kevin
Long, professional staff member; Michelle White, counsel;
Corinne Zaccagnini, chief information officer; Laurel Grover,
staff assistant; Phil Schiliro, minority staff director; Phil
Barnett, minority chief counsel; Kenneth Ballen, minority chief
investigative counsel; Kristin Amerling, Sarah Despres,
Christopher Lu, Michael Raphael, and David Sadkin, minority
counsels; Ellen Rayner, minority chief clerk; Courtney Cook and
Jean Gosa, minority staff assistants; and Barbara Wentworth,
minority research assistant.
Mr. Burton. Good afternoon. A quorum being present, the
Committee on Government Reform will come to order. Before the
distinguished ranking member and I deliver our opening
statements, the committee must first dispose of some procedural
issues. I ask unanimous consent that all Members' and
witnesses' written opening statements be included in the
record, and without objection, so ordered.
I ask unanimous consent that all articles, exhibits, and
extraneous or tabular material referred to be included in the
record, and without objection----
Mr. Waxman. I'm reserving the right to object. Is that
referred to by Members during questioning? Otherwise there has
been no reference.
Mr. Burton. That is fine.
Mr. Waxman. Any materials that Members refer to in their
questioning can be made part of the record?
Mr. Burton. Without objection.
I ask unanimous consent that a staff report and compilation
of exhibits regarding Mr. Chung's testimony and documents
regarding Mark Middleton be included in the record, and without
objection, so ordered.
[The information referred to follows:]
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Mr. Burton. I ask unanimous consent that a letter from the
Justice Department dated May 7, 1999, authorizing Mr. Chung's
testimony be entered into the record. And without objection, so
ordered.
[The letter referred to follows:]
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Mr. Burton. I ask unanimous consent that questioning in the
matter under consideration proceed under clause 2(j)(2) of
House Rule 11 and committee rule 14 in which the chairman and
ranking minority member allocate time to the committee counsel
as they deem appropriate for extended questioning not to exceed
60 minutes, divided equally between the majority and the
minority, and without objection, so ordered.
I also ask unanimous consent that questioning in this
matter proceed under clause 2(j)(2) of House Rule 11 and
committee rule 14 in which the chairman and ranking minority
member allocate time to members of the committee as they deem
appropriate for extended questioning not to exceed 60 minutes,
equally divided between the majority and minority, and without
objection, so ordered.
And one other item I would like to mention before we start
is I received a letter from the ranking minority member, Mr.
Waxman, yesterday regarding some kind of misunderstanding
regarding Mr. Sun and Mr. Chung as far as limitation on
questioning. I have talked to Mr. Sun and Mr. Chung and Mr.
Murphy, and there is no limit on questioning whatsoever, so I'm
glad we are able to lay that to rest right here at the
beginning so the minority will be able to ask any questions
they feel are necessary.
Today's hearing is going to focus a great deal on China. I
think this is important because there is a lot going on between
our two countries right now. We are all very upset about the
recent bombing of the Chinese Embassy in Belgrade. It was a
tragedy. However, we should not let that deter us from trying
to get to the bottom of Chinese efforts to influence our
elections or steal nuclear secrets. The Chinese Government's
actions should not be overshadowed or forgotten because of this
terrible mistake.
Today we are going to hear testimony about China's attempts
to interfere with our elections in 1996. These are very serious
allegations. Even more serious are allegations about espionage
by the Chinese Government at our nuclear weapons facilities.
We are not going to hear testimony on this subject today,
but every time I pick up a newspaper, I read new allegations
about Chinese spying. We have some very serious national
security issues here that we need to address. If China is
conducting covert operations to influence our elections, and it
appears that they are, then we have to treat this as a threat
to our national security. If China is stealing our nuclear
secrets, and it appears that they are, then we have a threat to
our national security. We have to treat it like a national
security issue, and so far we haven't.
In my view, this isn't about politics, and it isn't about
elections. It shouldn't matter if you are a Democrat or a
Republican. The Chinese Government is taking actions toward us
that are hostile, and we have to take it seriously.
Today we have a very rare thing. We have a cooperative
witness. Johnny Chung has reached a plea agreement with the
Justice Department. He has cooperated with them. He received a
sentence that makes it clear that the Justice Department
considers him a valuable witness. Mr. Chung has agreed to
testify today and tell us what he knows.
Over the course of our investigation into illegal foreign
money, we have had 121 people refuse to testify, 121. Eighty
people have taken the fifth, and a lot of people have left the
country or stayed overseas where we cannot reach them. We have
immunized a handful of these people, and they have testified,
but we still have over 100 people who have refused to testify.
Johnny Chung has told us that the head of China's military
intelligence agency gave him $300,000 and told him he could
give it to the President's campaign. That's pretty astonishing,
and this is just one witness. What would we learn if we could
get these other 100 witnesses to testify? What would we learn
from John Huang if we could get him to come forward and
testify? What would we learn if we could get Charlie Trie to
come forward and testify or Mark Middleton?
Johnny Chung has also told us that within 2 weeks of
receiving this money from General Ji, he gave $35,000 to the
Democrat National Committee.
After we finish this hearing today, some of the reporters
sitting here are going to call the DNC and the White House, and
I will tell you right now what their response will be. They are
going to say, we didn't know. We had no idea where Johnny
Chung's money was coming from. Well, if they didn't know, then
they must have been trying really hard not to find out. Just
ask the Federal judge at California who sentenced Mr. Chung. He
said, ``if Mr. Fowler and Mr. Sullivan didn't know what was
going on, they are two of the dumbest politicians I have ever
seen.'' This was a Democrat judge.
It is easy to understand why the judge said that. When
Johnny Chung showed up at a Clinton-Gore fundraiser in Los
Angeles in September 1995, he had 10 Chinese nationals with
him. When Johnny Chung showed up at a DNC fundraiser in Los
Angeles in July 1996, he had half a dozen Chinese nationals
with him. When he went to the President's radio address in the
Oval Office in March 1995, he was accompanied by six senior
Chinese executives. And we have a letter to Mr. Chung from Don
Fowler, the head of the Democrat National Committee, and in it
Mr. Fowler said, ``best of luck on your trip to China. I
enjoyed meeting your friend who is the wife of the chief of
staff of the Chinese Army.''
I could go on and on, but I won't. That is just as
distressing to me as--that this administration--that this
administration is still acting like that they don't know, and
that is very disconcerting.
Last year the President went to China. He met with
President Jiang Zemin. President Jiang said they didn't have
anything to do with the foreign money being funneled into our
campaigns. President Clinton just took his word for it. He
didn't even challenge him. Why? Just a month ago Prime Minister
Zhu Rongji was here in Washington. Johnny Chung's revelations
about his meeting with General Ji had just come out. Zhu Rongji
said he had checked with all of his top people, and nobody in
the Chinese Government had anything to do with trying to
influence our elections. He said that they had no involvement
in trying to steal our nuclear secrets, and once again, the
President just took his word for it. Why?
We asked the Chinese Government for visas to come to China,
to have our investigators come to China to interview people who
were involved in this fundraising. They would not give us
visas. In fact, they told us if we came to China, they would
arrest our investigators. Are these the actions of a government
that has nothing to hide?
We have asked the White House and the State Department time
and time again for help, and they will not lift a finger. We
have asked the Chinese Government for bank records that would
show where these millions of dollars originated. We have gotten
absolutely nothing. Are these the actions of a government that
has nothing to hide?
Why won't the Clinton administration push China to turn
over this evidence? The Clinton administration hasn't been very
aggressive in getting to the bottom of the fundraising scandal.
The nuclear espionage scandal looks even worse. The FBI tried
four times, four times, to get approval to tap the phones of
the main suspect in the Los Alamos case. The Justice Department
turned them down every time. Why?
The Energy Department kept the main suspect Wen Ho Lee in
his job for 3 years. He was kept on for 18 months after the FBI
said there was no investigative reason for him to stay on. He
had access to classified information the whole time. Why?
The President's national security advisors were thoroughly
briefed about China's espionage, but no action was taken for
over 2 years to improve security at those labs, and the
President continued to sign waivers to ship sensitive
satellites and other information to China. Why? Just yesterday,
the President approved a new satellite export to China. Why is
the President approving a technology transfer like this when we
haven't gotten any answers on these other issues from China?
These actions are serious, and these are serious issues.
This is why I have been saying that these are national security
issues and not political issues.
Now let me say a few things about our witness today. Johnny
Chung broke the law. He has made some serious mistakes. He has
done some things that we can't condone, and obviously he wasn't
alone. Eighty people have taken the fifth amendment, and
another 40 have left the country. I think Mr. Chung and his
family have probably paid a pretty high price for his mistakes,
but he is going to do something today that the other 100 people
haven't done. He is going to testify. He has cooperated with
the Justice Department, and he is cooperating with us.
What he is doing today isn't going to be very easy. He is
going to sit in front of this committee and all of these TV
cameras and reporters and admit that he broke the law, and that
takes courage.
What has Mr. Chung told us? He has told us that General Ji
Sheng De, the head of the military intelligence of the People's
Liberation Army, which is the equivalent of our CIA, gave him
$300,000. General Ji would be the equivalent, as I said, of our
CIA. It was wired to him through Lieutenant Colonel Liu Chao
Ying of China Aerospace, whose father was the head of the
People's Liberation Army at one time and a member of the
hierarchy in the Chinese Government.
Mr. Chung has told us that the general told him the
following: ``We really like your President. We hope he will be
reelected. I will give you 300,000 U.S. dollars, and you can
give it to your President and the Democrat party.'' Shortly
after this Mr. Chung gave $35,000 to the DNC.
Mr. Chung has told us that he was told other people were
also giving money to ``do good things for China.'' One of the
other people who was mentioned was Mark Middleton, a former
high-level White House aide. He was told that Mark Middleton
got a half a million dollars from a source that remains
unclear. Mr. Middleton has taken the fifth with this committee.
He has refused to talk to us.
Johnny Chung has also told us that he was told that a
Boeing representative from Hong Kong, a Mr. Young, was also
working with the Chinese Government. We still haven't resolved
who this is.
Johnny Chung has informed us that he was told by another
source that Charlie Trie asked the Chinese Government for $1
million to help the President. He'll testify that he saw the
head of the United States consulate in Beijing take cash in
exchange for visas. This is just outrageous.
Did Mark Middleton get half a million dollars from the
Chinese Government? If he did, what was it for? Did Charlie
Trie try to get $1 million from the Chinese Government, and did
he get it? We know that he got over $1 million from a Macau
developer with close ties to China.
Johnny Chung isn't going to solve all of these mysteries
for us today. Some of the things he witnessed firsthand. Others
he witnessed secondhand. In some ways his testimony will raise
more questions than it answers. Unfortunately when you have an
investigation that has faced the kind of massive stonewalling
that we have, you make progress by inches instead of feet.
Is Johnny Chung credible? Is he telling the truth? Well,
the Justice Department thought so. They worked with him for a
year. When it came time for him to be sentenced, they did not
recommend jail time. They did not recommend a stiff fine. They
recommended probation and community service, and that says a
lot about his credibility.
But we did some digging on our own. We subpoenaed a lot of
documents over the last 2 years. We went back through all of
these documents to see if they supported Johnny Chung's story
or not, and in most cases they do.
We looked at his passport, when Johnny Chung says he was in
Hong Kong meeting with Liu Chao Ying, and General Ji's passport
shows that he was there. He told us that he had to change his
plans and travel back to Hong Kong that day from mainland China
for the dinner. His passport backs that up. He said that Liu
Chao Ying told him that Mark Middleton got half a million
dollars from a Singapore group. We checked Mark Middleton's
bank records, and they showed that he received over $1.75
million from Asian businesses. One of the payments he received
was half-a-million-dollar payment from Indonesia. We don't know
what money Liu Chao Ying was referring to. If we could go to
Hong Kong to interview Liu
Chao Ying, maybe we can find out, but the Chinese Government
will not allow that.
We have a copy of a letter from Mark Middleton to one of
his associates in Singapore.
[The letter referred to follows:]
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Mr. Burton. I think we can put that on the screen. I am not
sure everybody can read that. It is small print. It mentions
someone named Liu. It says, ``thank you for the update on Ms.
Liu. I know that she must be concerned with nepotism, but I am
not sure how that affects us.'' We don't know what Mark
Middleton meant in this letter. He has taken the fifth, so we
can't ask him.
Johnny Chung told us that in the fall of 1995, the DNC
pressured him to contribute $70,000. We found an internal DNC
memo from that time period to Chairman Fowler of the DNC. He
was being asked to call Mr. Chung and tell him ``that bad
things will happen,'' if he didn't come up with the money. We
have assembled a staff report that lists Mr. Chung's statements
and shows that there are documents to back them up. At the end
of my statement, I will ask unanimous consent that they be
entered into the record.
Let me conclude by trying to put all this into perspective.
Why does any of this matter? Why should anyone care? As I said
at the beginning of my statement, this is a very serious
national security issue. The Chinese Government was making a
concerted effort to undermine our political system. They were
conducting aggressive espionage at our nuclear labs. These
aren't the actions of an ally. These are the actions of an
adversary. Yet until all of this came out in the media, I have
seen no evidence that this administration took it seriously. On
a couple of occasions the President said that he believed the
Chinese Government. Why?
Yesterday the President, as I said before, approved a new
technology transfer to China. He signed a new waiver to export
a sensitive satellite to China once again. In the face of all
of China's actions, the President is plowing forward with
negotiations to bring China into the WTO, the World Trade
Organization. Why? Is this the right way to respond to China's
actions?
I think the American people need to know the facts so they
can judge for themselves. That is why we are holding this
hearing. I don't think that this is a partisan agenda or a
partisan issue. Everyone ought to be concerned about China's
actions, whether you are a Democrat or a Republican. I voted
against MFN for China. A number of my Democrat friends also
did. We voted no because we have very serious concerns about
the way China has behaved.
I would like to make one final note. Over the past 2 years,
we have examined a lot of illegal contributions. We have seen
over and over again people making contributions in someone
else's name. They do this to hide their identity or exceed the
legal limits. It is obvious that this is a very serious
problem. The penalties on the books for making conduit
contributions are not stopping people from doing it.
Later today I am going to introduce the Conduit
Contribution Prevention Act. My bill will make this a felony
instead of a misdemeanor. It would make civil penalties tougher
as well. We need to stop those conduit contributions. I would
like to invite everyone on the committee, Democrat or
Republican, to cosponsor this bill. It should be a nonpartisan
issue.
[The prepared statement of Hon. Dan Burton as well as a
copy of the Conduit Contribution Prevention Act follow:]
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Mr. Burton. I now recognize my colleague Mr. Waxman for his
opening statement.
Mr. Waxman. Thank you very much, Mr. Chairman. I have just
a brief comment about the approach I am going to take at this
hearing. I generally accord witnesses a presumption that they
are telling us the truth in their testimony. Unfortunately, due
to false accusations Mr. Chung has made about others and
inconsistent statements he has made about his campaign
contributions, I can't give him that presumption today. Equally
as important, I don't presume he is not telling us the truth.
I commend him for cooperating with the Justice Department
and for appearing before this committee, and I am most
interested in his testimony. Our committee's role is not to
unquestionably accept information or selectively highlight
pieces that might fit into preconceived theories. In that
spirit, I believe our job this afternoon is to evaluate all the
statements Mr. Chung has made and simply assess whether what he
is telling us today is reliable and credible. I look forward to
the testimony.
[The prepared statement of Hon. Benjamin Gilman follows:]
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Mr. Burton. At this point would you rise, Mr. Chung. Would
you raise your right hand.
[Witness sworn.]
Mr. Burton. Good morning, Mr. Chung, Mr. Sun, Mr. Murphy,
and Ms. Cohen. Ms. Cohen is back there in the back.
I think right now we would appreciate it if you would go
ahead and make your opening statement, and because you have a
lot of ground to cover, we will not put any limitations on your
time because you have a story to tell, and we want to hear it
all. So, Mr. Chung, we will now hear your testimony.
STATEMENT OF JOHNNY C.C. CHUNG
Mr. Chung. Thank you, Mr. Chairman. Good morning, Mr.
Chairman and the members of the Committee on Government Reform.
My name is Johnny Chung. I reside in Artesia, CA, with my wife
Kathy and three children.
I have been asked to testify before this committee on the
matters related to certain political contributions I made from
1994 through 1996. With your permission, Mr. Chairman, I will
read this written statement and ask that it be made part of the
record of these proceedings today.
Mr. Burton. Without objection, so ordered.
Mr. Chung. In testifying before the committee, I hope to
clear the record once and for all regarding a number of matters
that have touched my life so deeply. In particular, I hope to
address and clear up a number of issues that have been raised
concerning the motivations and circumstances surrounding my
political contributions between 1994 and 1996, and in
particular the many falsehoods and misleading statements made
by the media, politicians, and others concerning my
experiences. I therefore welcome the opportunity to tell my
full story to you today.
During our last meeting in November 1997, I advised you
through my counsel that I was unable to provide you with the
details of certain of my business relationships due to a
pending criminal investigation by the Department of Justice.
The Department of Justice has now agreed that I may testify
with certain limitations, and I will make every effort to
provide this committee with full and accurate information and
to answer as many questions as possible that I previously was
unable to answer. After my testimony is complete, I am looking
forward to putting this matter behind me once and for all.
At the outset, I must make the statement and observation
that I believe my testimony here today will probably disappoint
a lot of people. Contrary to what some people think, I have
never acted as an agent for the Chinese Government. I have
never sought to do anything that might facilitate any sinister
attempt to undermine the interests of my country, the United
States, which I love. Far from it. I am a first-generation
immigrant, a U.S. citizen, who, like your forefathers, do not
speak English as good as my children and my wife do, but I am
as loyal to my country as any of you.
One of my deep regret about this entire matter has been the
terrible impact that the campaign finance scandal caused in
part by myself has had upon Asian Americans and, in particular,
Chinese Americans. This controversy, which has been intensified
by partisan politics and a sometimes vicious and overreaching
media has caused me to fear that there will be a resurgence of
the same type of anti-Chinese hysteria as we have seen
historically in this country before. It is my hope that my
testimony will help put a stop to the type of inflammatory
columns written by people like Mr. Safire in the New York Times
and others who seem to want to blame everything on China and
cast doubt on the loyalty of Chinese Americans such as myself.
In this regard, I would note that Chinese Americans and
Asian Americans have for over a century contributed to the
growth and greatness of America. Asian Americans, like your
ancestors, have contributed and participated in every level of
our society. However, in my view, we have not been successful
in being full participants in the political process. I would
note there is not a single Asian American member of this
committee, except for Mrs. Mink of Hawaii, and very few Asian
Americans in Congress or at high levels of our government.
The system is set up so that if you donate money, you can
participate. To participate in the American political process,
Asian Americans, like myself, sought access just like any other
group through a system we did not create. It is about this
system that I will tell my story and how it ultimately
destroyed my business and my reputation.
In telling my story to you, I must make one other
observation and request. It seems to me that the American
people deserve an answer from you politicians who talk a lot
about changing and improving the system. Yet more than 2 years
after this controversy erupted, you, the Congress, have done
nothing to change this system. Indeed, within the last month I
received an invitation to a fundraiser where I might have got
yet another photo opportunity with some politician, although
most of you would probably run away from me at this point.
What I want to say here is that I hope my testimony doesn't
really end up being a shouting match between you Republicans or
Democrats. Your attacking each other or attacking others who
have had their reputations ruined, in some instances without
any justification, serves no useful purpose.
If you really want to do something about this, then change
the system that allowed me to, with a few selected donations,
attract the interest of the head of Chinese military
intelligence. In other words, although I certainly feel I have
some responsibility in this matter, I also think you should
look to yourselves and ask yourselves if you really want to do
something about this. Adopt some laws and regulations that
limit the need for such huge amounts of money in order to run a
political campaign. Both sides are probably equally at fault
for letting this need for money get out of hand. We
unfortunately live in a system where Ambassadorships can be
bought, and staying at the White House can cost as little as
$50,000, or access to our President or a Presidential candidate
can be had if you are famous in Hollywood. Again, please keep
in mind that I didn't create this system, you did.
I therefore ask this committee to keep in mind that I don't
think I am alone in suggesting that you politicians have the
opportunity to be either heroes or hypocrites. I hope my
testimony will help you ultimately to become heroes. When the
historians write about this chapter in our history, hopefully
they will say that our democracy survived the challenges of
partisan politics, and we were able to create a stronger and a
better country. You politicians should not always kowtow to the
media, who you allow to influence you way too much, a media
which doesn't hesitate to destroy one's reputation without
solid facts.
Were it not for the support of my family and the members of
my church, I am not sure I would have been able to have the
strength to deal with the public and personal attacks on my
character. I do remain hopeful that as I tell my story today,
you will understand that this former busboy and supposed friend
of the President and politicians has paid a very high price for
my involvement in politics. I found myself wearing a body wire
and along with my family at one point in protective custody. I
simply want to go back to a normal life where I can become an
active and contributing member of my community once again.
I would like now, Mr. Chairman, to talk about my personal
and business background which led me to get involved in this
matter.
I was born and raised in Taiwan and came to the United
States in 1983. After working as a busboy and working in a
Holiday Inn, I ultimately opened my own business in the late
1980's. After having mixed success, I started a fax broadcast
business using what was then fairly new technology. However, my
desire to expand this business required a substantial amount of
capital. As a consequence, I was constantly looking for
shareholders or investors to help me ultimately take this
business public.
By 1992, I began to target my business toward government
agencies, political candidates, and elected officials who I
believed could get the most useful benefit from a fax broadcast
capability. As my business records reflect, I was able to get
business from a number of political candidates and ultimately
secured a contract with the State of California from then
Governor Pete Wilson's office.
As a consequence of my efforts to develop business, I
traveled extensively to many of the offices of the Governors
throughout the country, including the then Governor of Arkansas
Bill Clinton. It was ultimately at a national Governors'
conference in 1994 that I first came in contact with an
official of the Clinton administration who later invited me to
attend my first significant fundraiser, the President's 48th
birthday party in August 1994.
It was after this event that I began to realize the value
and importance that political donations could have on my
ability to get access and to further my business contacts. I
also found it to be exciting. I can never forget the thrill
that me and my family and my parents had when we first met the
with the President and the First Lady at his birthday party.
While you elected officials may be used to that kind of thing,
most Americans, I think, including my family, were very much
impressed and overwhelmed by this event. You get the feeling
when you go to these things that you are a VIP, and even though
people treated us like VIPs only because we gave the money, it
still felt good.
I began to realize, however, that I could also get a little
something back for giving money. I saw the opportunity of
attending these events and getting pictures with the people
like the President and the Vice President and others as an
opportunity to promote my business, and in particular the
possibility of access for potential shareholders, investors or
other business clients. And as I will relate you to shortly, my
first contacts with the Haomen Beer people in December 1994
started me on the road toward attracting investors and
relationships from a number of the business people based in the
People's Republic of China. Little did I know then that these
relationships would ultimately cause me great heartache. At the
time I saw it as a great opportunity.
One thing I should try to make very clear at this point.
Beginning in 1995 through the end of 1996, my business
relationships in China evolved from efforts to obtain fax
business to a business consulting relationship where I
performed many services for these Chinese business contacts. It
is important to have people understand that much of what these
people wanted from me went well beyond me simply just taking
them to a fundraiser. These people wanted me to do everything
from assisting them in getting a visa to enter this country, to
escorting them around the country, providing interpreter
services, paying their expenses, and making introductions to
both business and government contacts.
Certainly it was very important to these people to have
pictures taken with high-level American Government officials.
For people who do business in China, pictures are worth their
weight in gold. Just like many American companies such as Coca-
Cola or Pepsi will spend millions to advertise in a Superbowl
game, these business people and their companies treasure
photographs with important people, because in China such
photographs project a great sense of importance and reflect the
degree of your importance. As a consequence, they were willing
to provide me significant sums of money to help them to get
these photos. We in America sometimes don't realize how
important such things are in other cultures.
In addition, I promoted myself to these people as someone
who could get a lot of such things done, and that if they
provide me with consulting fees or choose to invest in my
company, I could assist their business efforts in the United
States. It is my opinion that much of what these people wanted
from me had less to do with influencing any election as it was
to gain what most Americans want from our system: influence and
the ability to develop relationships with important people. A
lot of the people I met in China like Americans and wanted to
move here or send their children here for education. In fact,
despite the recent controversy about technology and espionage,
a lot of the Chinese I met in the People's Republic of China
admire Americans and wanted to do business and develop
friendships.
Much has been written and said about me being a conduit for
foreign source donations to the Democratic National Committee.
I have told the FBI and I previously have maintained that
whenever I was given money, it was generally to provide a
number of services for my business partners, clients, or
investors. While there is no doubt that these people had some
understanding that when I took them to an event, I would often
have to donate to get them in, there was never any discussion
about how much to give or when to give. Perhaps the only
exception was my encounter with Ji Sheng De, which I will
discuss in a moment.
For the most part, however, I chose when to go to an event,
who to invite, and how much I was to give. I usually decided
whether to attend an event depending on whether or not I was
trying to solicit someone for business and impress them or
demonstrate to them that I had the ability to get them to meet
the President or some important figure and have their photo
taken with them. For whatever reason, this ability to do this
service, among others, suggested to many who I dealt with in
the People's Republic that I had connections and could
introduce them to powerful people in this country.
I will note for the record that I received in excess of $2
million from 1994 to 1996 as a result of my business
relationships in China. Less than 20 percent of that sum was
actually donated to political causes. A substantial portion of
that money was used to either pay the expenses of my business,
the expenses of entertaining, and providing services to these
business groups, and to return investments back to some of my
shareholders. Even with the incident involving Ji Sheng De and
Liu Chao Ying, I have never intended for my business to be used
to make illegal political contributions. I always intended that
I would have the ability to decide what to do with the money
after I received it.
Before I turn to a specific discussion of the various
events and individuals that I dealt with between 1994 and 1996,
I would like to say that I am very disappointed in the way that
the Democratic National Committee has treated me in this
matter. They prejudged my case, attacked me publicly, and even
attempted to persuade Judge Real, the judge who sentenced me
last December, that I somehow was an evil man and deserving of
great punishment. I think that they should be ashamed of
themselves for attempting to jump on me and hide from the fact
that they aggressively solicited me for money from August 1994
until the campaign finance controversy came to light in late
1996. I now realize that they took my money with a smile and
made fun of me when I turned my back.
Today I have mixed feelings about the President and the
First Lady, but I can't help but think that they used me as
much as I used them. I also think, however, that it was grossly
unfair for the DNC to attack me when they were fully aware that
I was doing a lot of business and cultivating friendships with
people from the People's Republic of China. I felt vindicated
when Judge Real at my sentencing said that if the DNC didn't
know about my business relationships, they had to be the
dumbest politicians he had ever seen.
Most important, I thought it was vicious for them to write
a letter to Judge Real when they did not know the true facts,
particularly after I had secretly cooperated with the
government, worn a body wire, put myself and my family at
potential risk, and for some period of time lived in fear and
uncertainty. On the other hand, the DNC certainly was not aware
of the contacts that were made by Mr. Ji and the incident
involving my receipt of $300,000 from Liu Chao Ying in August
1996.
I will now turn to my recollections of those events and
other matters that I believe are of some interest to this
committee.
Liu Chao Ying. I first met Liu Chao Ying in a restaurant in
Hong Kong in June 1996 at a dinner I attended with one of my
business associates. There were a number of big tables full of
people at this dinner. Apparently Liu had heard that I might be
able to get her access to high-level people in Washington, DC,
and Liu asked me if I would be willing to get her an invitation
to the United States. I agreed, and eventually she became part
of the meetings and events that I had already scheduled in July
1996 for Mr. Yao and others.
I was going from Los Angeles to New York with Mr. Yao, who
at that time wanted to take his companies public. I had
previously met Federal Reserve employee Israel Sendrovic on a
cross-country plane trip, and Mr. Yao asked me if I could set
up a meeting for these officials.
I took Liu along during these meetings with officials in
New York and Washington, DC. She seemed impressed and told me
that she wanted to do business with me. She explained that she
was thinking of putting a company on the New York Stock
Exchange. She said she would give me $300,000 that I was
supposed to use to help her set up her business, which was
supposed to be in telecommunications and commercial fishing in
southern China. I then set up Marswell Investments in late
July, early August 1996 for this purpose. At that time I used
my own money to set up the company, but I expected that these
costs would ultimately come out of the $300,000 Liu Chao Ying
had promised me.
During the Washington, DC, event with Liu and Mr. Yao, I
introduced Liu to Don Fowler as the daughter of a powerful
general. Fowler joked that he had a low rank in World War II.
Also during that trip, I had a discussion with Liu Chao Ying at
the Willard Hotel. Liu Chao Ying asked me if I had a Hong Kong
back account. I said yes and gave her my bank account number in
Hong Kong by writing ``void'' across a blank check and giving
the check to her. During this conversation, Liu Chao Ying also
told me: Don't do business with Mr. Yao, just do business with
me. I was still not sure if she would provide the $300,000. I
did notice on this occasion and on another occasion that a
picture of me was missing after I met with Liu Chao Ying. The
other occasion was during one of my visits to Hong Kong.
Also during my various discussions with Liu Chao Ying, she
informed me that she was going to change her travel plans as a
result of what she felt were our very productive meetings.
Originally she had been scheduled to go back to Hong Kong after
this trip by changing her plans so that she could go directly
to Beijing. She later told me that the reason that she went to
Beijing instead of Hong Kong was so that she could tell her
father about her trip.
August 1996 meetings with General Ji. On August 7, 1996, I
returned to Hong Kong with my daughter and her friend. On
August 11, we were in Zhuhai, which is across the border from
Macau and in China, when I received a phone call from Liu Chao
Ying, and she invited me to a dinner with someone who she said
was a very important man from Beijing. I accepted the
invitation.
The dinner was on August 11, 1996. Liu Chao Ying picked me
up in her car, and we went to a restaurant which is famous for
its abalone. I do not remember the name of the restaurant. She
told me that the man we were going to meet with was very
important. Liu Chao Ying stressed that I should not be afraid
to talk myself up, and she encouraged me to show him my
brochure. Liu Chao Ying told me that I was a much more
impressive prospect than Charlie Trie because I had better
connections than Charlie Trie and that my brochure was much
better than Trie's.
I also would like to add one oddity that stuck out in my
mind. At one point during our conversation, Liu Chao Ying made
a cellular phone call from the restaurant's basement. I asked
her how she could make a call from a basement. She said there
was a special antenna.
When General Ji arrived, he came through the kitchen and
introduced himself as Mr. Xu, the Chinese equivalent of Mr.
Smith. The general said, you can call me Mr. Xu, and it was
clear from the way he said this that this was a bogus name. I
and Liu Chao Ying spoke with Ji about her recent trip, talking
up the past times I was able to get meetings with politicians
and dignitaries. Liu Chao Ying was very deferential to Ji in a
way that it made me think he was her boss or superior.
The key information relayed to me at this dinner from Ji
was the following: We really like your President. We hope he
will be reelected, or we would like him to be reelected. I will
give you 300,000 U.S. dollars. You can give it to or use it for
your President and Democratic party.
I was somehow startled by this proposal, and I wondered who
this man really was. However, I don't want to insult him or
insult Liu, so I remained quiet and agreeable. I said something
like, this is fine. It would be great to do business together.
The more business I can do, then the more money I can give to
the President and Democrat party.
Ji then left through the kitchen and then we left the way
we came in. No one paid the bill.
When I got in the car with Liu, she put her finger up to
her lips and indicated that I should not talk while they were
in the car with the driver. When we got out of the car, I
asked, ``Who is he?'' And she told me the General's name and
who he was. I did not recognize the name.
Liu scolded me and said that I need to know my Chinese
history better. She explained that his predecessor was the
government official who said that the American government
should be more worried about missiles headed to Los Angeles
than Taiwan.
She then told me Ji was the military intelligence director
of the People's Liberation Army. She wrote down his name on a
small piece of paper and gave it to me and I put the paper in
my pocket. Since my daughter and her friend were there, I was
not going to make a big deal about this.
At the time, I was staying with a friend. The next day I
told my friend who I met with, and my friend said that Ji is a
very important person. I also showed my friend in Shuhai the
piece of paper with the name, and he recognized the name.
The second meeting with Liu Chao Ying and General Ji: On
August 13, 1996, I met again with Liu Chao Ying and General Ji
back in Hong Kong. We met at a hotel lobby in the bar. The
hotel is next to the Shangri La Hotel. I first was with Liu and
then General Ji came in to join us.
Ji said to me, ``now you know who I am.'' He told me that
his name was so sensitive that he still wanted me to call him
by an alias, ``Mr. Xu.'' Ji spoke in Chinese to Liu, saying,
``I will wire $300,000 to your account and you wire it to
him.'' Ji said he needed a ``receipt'' or ``report'' to give
``to the organization''.
At this point, Mrs. Ji came into the bar and sat with us
and the talk changed to talk about children. General Ji had a
son who was attending UCLA. His son wanted to stay at UCLA and
in the United States. Mrs. Ji said the son, Alex, was the
favorite of his grandfather. It was a very informal discussion
of mothers and fathers talking about their kids.
Mrs. Ji also said she was going to come back to the United
States, where she told me she had already lived for 11 years.
Alex began to work AISI, my company, shortly after I returned
from this trip. He worked beginning in October and November
1996 and on and off through February 1997.
After Ji left this meeting, I briefly expressed to Liu my
concern about getting involved with the General's money. My
understanding was that she was going to give me the $300,000,
and now that was changing and I didn't want to get involved in
this kind of arrangement. I then went back to my hotel room.
The next morning, August 14, Liu called me early and was
yelling at me about not having a United States dollar account
in Hong Kong. I had previously given her my account number at a
Hong Kong bank. Liu always talked in foul language and she said
to me, ``Damn it''--her language was worse than this--``how
come you don't have a U.S. dollar account?'' I told her to come
over after she was done so I could talk to her.
When she came over later that day, I continued to raise my
concerns about getting the money from General Ji instead of Liu
herself. I also pointed out that the money was supposed to be
for the various business deals we had discussed in July.
In response, she told me that I could use the money for
three things: I could give it to the President and the
Democratic party; I could use it to take care of the General's
son, Alex; and I could use it for my own purposes/business and
to set up my and Liu's companies. I told Liu I was concerned
because she had promised me her money and now this was
something different.
In what I perceived as an effort to persuade me that it was
OK to do it this way, she told me that Mark Middleton also
``got half a million'' from a Singapore group, from someone
named Hwang, Huang, or Wong, and the purpose of the money was
``to do good things for China,'' or to benefit China. She also
mentioned a Boeing representative in Hong Kong who she said
they give a lot of business to.
In conjunction with the Boeing representative, the name
Young was mentioned. She also said that ``we gave him the
business in order for him to do good things for China.'' I did
not have a first name of this Mr. Young. My sense was that I
was told this so I wouldn't be worried about taking this money
from Ji and Liu Chao Ying. My impression of these other
examples was that they were involved in developing
relationships and access to help China.
I had limited dealings with Mark Middleton but knew who he
was when Liu mentioned him. I had met him through Richard
Sullivan in 1994 and had contacted him in early 1995 to talk
about a friend who needed some assistance with a Swiss bank
account. The friend was Ruth Lin, a child of a rich Chinese
family. Supposedly she was prepared to help the DNC if she
could get help from this bank account.
She told me that there were people who were trying to kill
her and she wanted to get the family's bank account in
Switzerland. I called Sullivan and asked him to have Mark
Middleton call to help her. I also asked Middleton to call her
too. Middleton told me that my associate, Larry Liou, was also
pressing him to do something for her. I also saw Middleton at
the White House when I visited in 1996.
After these representations from Liu, I kept the money,
which actually had already been transferred into my account
that morning by Liu. I never had any intention to give the
$300,000 to the Democrats, and I ended up following Liu's
advice and used the money primarily for myself and for helping
the General's son, although I did make some donation to the DNC
that was from the same account into which Liu made the deposit.
I commingled money from multiple sources into this account,
and I did not intend for the donation to come strictly from
Liu's funds. I also donated to John Kerry in this timeframe,
but in my mind I had already obligated myself to contribute to
Kerry back in July when his people arranged the meeting at the
SEC for Liu Chao Ying and Mr. Yao. As I have said before,
although I received money from many sources, I alone decided
how and when to donate it, who to donate it to, and how much.
I believe my bank account at Overseas Trust Limited shows a
wire being received on August 14, 1996, and then it went to my
Cal Fed bank account. I wrote a check for the President's
birthday party from that account.
On August 16, 1996, I transferred the money from Cal Fed to
General Bank in order to make a contribution to the DNC. I
would also note that on this same day, Mr. Yao wired $200,000
into this same Overseas Trust account.
I always considered the money in this account, including
the money from the General, to be my money, and I was free to
do with it what I wanted. I emphasize that except for the
General, no one told me to give money to the Democrats. All of
the money I received I have reported as income.
I next saw General Ji's wife when she came back to the
United States with her son. I set up their attendance at a
Presidential fundraiser, the ``Back to the Future'' event, at a
California movie studio on October 17, 1996. I took my driver
and secretary as well as the General's wife and Alex to meet
the President.
There was a mix-up with the DNC, and my driver and
secretary were given a private audience with the President,
while me and the General's wife and son were not included.
While my driver and secretary were very appreciative, I was
very upset. When the President came into the main event, I
moved my way to the front and got in contact with the President
and introduced the General's wife and son. The President spoke
with Alex and asked him what he was majoring in at college. A
picture was then taken by the General's wife or Alex, but I do
not know what happened to it.
Ultimately, I did not donate any money to the DNC for this
event because they made a mistake with the introduction and
photo opportunity. Karen Sternfeld of the DNC complained to me
that I didn't give them enough money, and I explained to her
that this was a very important guest and they had made a
mistake. I said Irene Wu, my employee, usually handled all of
the details in setting up attendance at these events and she
had called the General's wife and son to set this up. At this
event, I tried to talk with the Democratic National Committee
chairman, Don Fowler, and Fowler scolded me for not meeting my
fundraising obligations.
At some point in the fall of 1996, General Ji raised
concerns with me that Liu Chao Ying could only get a one-entry
visa instead of the multiple entry visa that she had received
on a previous occasion. Before the July 1996 Eli Broad
fundraiser, I went with Liu to get a visa in Guangzhow, China,
and told a female consular officer that since this was a
general's daughter and that she previously had a multiple entry
visa, she should get a multiple entry visa again.
After Liu deposited the money into my account, I wrote a
letter, August 18, 1996, to get Liu Chao Ying an invitation to
Washington, DC, and to go to the Democratic National
Convention. At this point, Liu didn't get her visa and she
couldn't come. Don Fowler also invited her to come to the
convention.
Charles Parish: In early 1995, Mr. He, the president of
Haomen Beer, asked me to obtain a visa because his visa was
expired. I had previously met with Mr. He when I took he and a
delegation around Washington, DC, in December 1994 in order for
them to promote their beer in the United States.
I took Mr. He to the U.S. Embassy where I was introduced to
Charles Parish. I felt at that time that Mr. Parish and I sort
of ``hit it off'' and were going to be friends. It was not
until later that I became aware that Mr. Parish and He of
Haomen Beer had developed a separate relationship.
Charles Parish helped me get visas for dozens of people who
asked me to provide them with invitations to the United States.
I also socialized and did many favors for Mr. Parish. I took
him as my guest to the September 1995 DNC fundraiser at the
Century Plaza Hotel in Los Angeles, to which he also brought
his sister and his girlfriend.
At the event, I took Parish to a private VIP reception with
President Bill Clinton. Mr. Parish insisted that Mr. He and Mr.
He's girlfriend have the opportunity to have their picture
taken with the President. This was a request that prompted the
DNC to ask me for an additional $70,000 contribution.
After the Century Plaza event, I arranged a private tour of
First Lady Hillary Clinton's office for Mr. Parish when both he
and I were in Washington, DC. At Mr. Parish's request, I gave
invitations to the United States to at least two women who were
girlfriends of his.
In Beijing, Parish would occasionally stop by my office. On
one of these visits he asked me to hire a computer tutor to
train his secretary at the Embassy. I spent $500 of my own
money accommodating this request. He also asked me to pay the
tuition for seven students who he knew that wanted to be
educated in the United States. Although I did not know these
students, I spent between $7,000 to $8,000 of my own money
doing this for Mr. Parish, including sending school supplies
like computer programs and books directly to Beijing at his
request.
Charles Parish did help me out on many occasions. As I
stated previously, he approved visa applications for business
associates that I brought to him. However, by the end of 1995 I
decided I did not want to continue my relationship with Parish.
Part of the reason why I no longer wanted to deal with Parish
was because he and Mr. He had entered into a relationship that
I was not comfortable with.
On at least one occasion I was asked by Mr. He to give a
shopping bag of money and visas to Parish. Several months
later, Mr. Parish asked me to have Mr. He--I want to make a
correction here. I was asked by Mr. He to give a shopping bag
of money and a passport to Mr. Parish. Several months later,
Mr. Parish asked me to have Mr. He call him. Parish said that
he wanted to be sure that these people he provided visas for
actually come back to China. Later, Parish told me that indeed
they did return to China.
I became unhappy with the way I was being treated by my
business associates in Beijing, so I decided to close my
office. Too many people were asking me for visas rather than
doing business with me.
A gentleman, Robert Luu: Early in 1996, when I was in
Beijing, I said I was called in the middle of the night by a
man named Cui Bao Chien, connected with the Great Wall
International Culture Co., who woke me up and said I need to
come over to where he was, a karaoke bar. I went there and
walked into the room where I was directed, and it was a
conference-sized room with men and women around a table.
I was introduced to the people, and one of the people in
the room was Mr. Robert Luu, who was a Chinese-American United
States citizen who was in Beijing and had not gone back to the
States because of some legal problem. He asked me how to handle
his case, and I told him he should go back to the United States
to work it out.
I next met Luu in mid-1996. Luu came to the AISI office in
Los Angeles where I met him for approximately 10 minutes. Luu
discussed a business proposal.
The next time I heard from Luu was before my plea. In
February 1998 I received a call at my business office from Mr.
Luu. A message was left that I had received a phone call from
Mr. Luu from Beijing. I didn't remember who Luu was and I did
not call him back.
I pled guilty in March 1998 and began being debriefed by
the FBI. Luu called me again. At that time I had been told by
the FBI to keep a recording device to record any suspicious
conversations, so I did so with this man.
In late April/early May 1998, Luu called me and asked how I
was doing. He also spoke sympathetically about me being in a
difficult situation. Luu asked to meet me, and I obtained
specific instructions from the FBI about how to deal with Luu.
Again, I was instructed to record all of their conversations.
In their first meeting, Luu started talking about a
Commander Li who wanted to take care of me. The message was as
follows: ``If you keep your mouth shut, you and your family
will be safe.'' The Chinese are more polite and indirect than
this, so the words do not precisely translate. The Chinese
communication was much more subtle. Nevertheless, this was how
I interpreted the meaning of the words.
Essentially the message that I believe I was given was that
me and my family would be safe if I didn't, and if I did talk,
I could not be certain what would happen. At a minimum, I
believed I was being threatened. The FBI told me that they
suspected Luu might have criminal connections.
Luu also suggested he was in contact with some people from
Beijing who were also known to me. Luu also mentioned that he
received money from Beijing. Luu said they would give me money
to take care of my legal expenses and my family and I could
retire.
Luu also asked if we could meet again and gave me an
address. I was also given a code to use. This was in early May.
Throughout this process, the FBI was monitoring communications.
The FBI identified Luu as a San Gabriel businessman.
In the next meeting with Luu, I raised questions about my
security. We met in an open area for about 10 minutes, and Luu
wanted to know the name of my judge. Luu also gave me the
business card of an attorney. He told me he wanted me to meet
that attorney at a downtown location and asked me to bring my
case file.
Again Luu inquired about my family and he again implied
that I should keep quiet, and that if I did so, things would be
OK. Luu also told me that he would give me money to pay for my
legal bills and said that he thought it possible that Chinese
political prisoners could be released if I did not cooperate.
At that time, I felt Luu was scripted in the same way that I
had been scripted by the FBI.
In the first week of May, I learned that the New York Times
was doing a story that involved Luu Chao Ying and the $300,000.
The FBI and I were very concerned that the news story would
scare Mr. Luu off. My attorney and I tried to get the New York
Times to kill the story. They refused.
On the day before the story came out, May 15, 1998, I ended
up going forward with a meeting with Luu and his attorney. I
consulted with the FBI before I proceeded. The plan was to tell
Luu and the attorney that the New York Times may come out with
a bogus story, and I was going to say that the FBI was really
beating up on me, and I actually gave them an FBI agent's
business card.
When I met with the attorney and Mr. Luu, there were FBI
agents throughout the building. I was told the attorney was
connected and knew the No. 3 person at the DOJ, Department of
Justice, and that he was familiar with the judge that was
presiding over my case. Luu and the attorney were pitching me
to replace my lawyer, Mr. Sun. The lawyer gave me an example of
someone who did not cooperate and how everyone round him was
taken care of. He said that this client was sentenced to a
country club jail.
One of the things that the FBI encouraged me to ask Mr. Luu
was ``Who is behind you?'' When I asked him, Luu responded by
giving me the nickname that I had given previously to Liu Chao
Ying; the nickname ``Gunyang'' which means ``country girl.''
Luu said Gunyang was happy that I was protecting her. Luu also
mentioned General Ji. Luu also suggested they could plant
newspaper story and that I might be able to get a Presidential
pardon.
Separately, Mr. Luu implied that they could ensure that the
judge would give me a light sentence. The attorney also said he
had experience with Watergate. I asked him how he could help
me. I was coached by the FBI to be skeptical and press for
answers. In this meeting Mr. Luu said that they could take care
of my attorneys' fees.
I was very nervous during this meeting and afterwards the
FBI concluded that I had to be moved to a safer place. At that
time they moved me to a hotel for 21 days with my family. My
daughter, who was graduating in this timeframe, had to go to
graduation with an FBI escort. I also had many phone calls and
faxes with Mr. Luu, both before and after these meetings. This
was a period of great stress for me and my family.
There were at least a dozen meetings and conversations
between me and Luu during May, June and July, up through the
President's visit to China in the summer of 1998. On Memorial
Day weekend, Luu said he had money at his house for me to pick
it up, but the FBI was afraid for me to be alone at his house
and they didn't have me go through with picking it up. At
another point, Luu was going to put money in an account for me,
but he didn't come through with it.
By July, Mr. Luu started making self-serving statements on
the tapes and tried to distance himself from previous
statements. I was instructed by the FBI to tell Mr. Luu that I
was going to be subpoenaed by the grand jury and that I had to
tell the truth. Mr. Luu at that point had talked about how he
thought he was being followed or taped and he told me to tell
the truth.
By the end of the summer, I told Mr. Luu that I was going
to be subpoenaed and asked what I should do. By this time, Luu
suspected something was going on, either he was under
surveillance or he was being taped, and he began making self-
serving statements and exculpatory statements. Luu said if he
was ever caught, he ``would deny'' everything, and that he
``doesn't know Luu Chao Ying, doesn't know anybody.''
Luu told me at this point that I should tell the truth. Luu
also said at this point he just wanted to get my case for the
other lawyer. I also asked Luu if I should blame this on
General Ji and Mr. Luu said sure, the ``Gunyang'' would like to
do that.
My last question to Luu was, ``What should I tell them
about you?'' This question made Luu very uncomfortable and Luu
said, ``I know nobody. I am nobody.'' I told him I couldn't lie
to the grand jury. I worked with the FBI throughout this entire
effort and was coached on what to say to Luu.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Chung follows:]
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Mr. Burton. Thank you, Mr. Chung. That was a very, very
thorough statement, and we do appreciate that.
I will now recognize the committee's chief counsel, Barbara
Comstock, for 30 minutes for questioning.
Ms. Comstock. Good afternoon, Mr. Chung and Mr. Sun, Mr.
Murphy, and Ms. Cohen. I want to thank you, and I want to note
for the record that we met approximately 2 weeks ago, majority
counsel, myself, Mr. Wilson and Mr. Griffin, and also minority
counsel were included in that meeting, and we appreciate your
working with us for 2 days to informally discuss this and your
cooperating with us in this matter. I know it has been a long
ordeal for you, Mr. Chung, and your family, and we appreciate
your testimony here today.
Mr. Chung, on March 17th, 1998, you pled guilty to charges
of making almost $30,000 in contributions to the Clinton-Gore
1996 campaign, as well as Senator John Kerry's campaign, and
you also pled guilty to charges involving bank fraud and tax
evasion; is that correct?
Mr. Chung. That is correct.
Ms. Comstock. And in your plea agreement, you agreed to
cooperate with the government and with all the investigations,
correct?
Mr. Chung. That is correct.
Ms. Comstock. And I know when we were out at that meeting
with you a couple of weeks ago, we met with the FBI agent. J.J.
Smith was with us; is that correct?
Mr. Chung. That is correct.
Ms. Comstock. And he was the agent you worked with
throughout your cooperation?
Mr. Chung. Yes, that was the agent who I worked with.
Ms. Comstock. OK. I know he had expressed your cooperation
to us when we were there, and was that your impression
throughout your time working with Mr. Smith?
Mr. Chung. Yes.
Ms. Comstock. And as a result of that cooperation, you were
given a sentence of 5 years probation and 3,000 hours of
community service, correct?
Mr. Chung. That is correct.
Ms. Comstock. From what we have been told from Justice
Department and FBI sources familiar with your case, this is the
type of sentence that is only provided to witnesses who the
government feels provided both substantive information as well
as a great deal of cooperation. Was that your understanding
also?
Mr. Chung. That is correct.
Ms. Comstock. Now, I understand as a result of that
cooperation, you and your family have also experienced what you
were just testifying to, both you and the FBI perceived as
possible threats against your security.
Mr. Chung. That is correct.
Ms. Comstock. And I think we will get to that a little
later, but I guess it is clear that you feared for your safety,
and even more so the safety of your family?
Mr. Chung. Yes, that is correct.
Ms. Comstock. Now, as you explained to us, Mr. Chung, back
a few years ago you were very much a welcome person at the
White House, correct?
Mr. Chung. I guess so.
Ms. Comstock. You were at many of the fundraisers and
events. I believe you were at the White House almost 50 times;
is that correct?
Mr. Chung. That is correct.
Ms. Comstock. And when this matter first became public in
late 1996 and early 1997, you made the observation that you
thought the White House was like a subway. ``You have to put
coins in to open the gates.'' Was that your observation?
Mr. Chung. Yes, that is correct.
Ms. Comstock. And as a result of this access that you had
to the White House and other high-ranking administration
officials, that made you known in China as somebody who had a
lot of high-ranking connections; is that correct?
Mr. Chung. That is correct.
Ms. Comstock. You told us about after you had the Haomen
Beer people in the White House in December 1994, they had
pictures taken with the President. When you went back to China
in 1995, how were you greeted by those folks?
Mr. Chung. After we had the pictures taken at the White
House at the Christmas party of 1994, Haomen Beer people
welcomed me at China with a red banner in their beer
manufacturing company, and they welcomed me with a big party.
Ms. Comstock. They had also used their pictures with the
President for their beer commercials or beer advertising; is
that correct?
Mr. Chung. I did not know until the campaign contribution
comes up. When I was in Beijing there ask a part of street I
never know I should go. I would say thank you to the CNN, show
me the pictures on the TV. That I know at that time. They used
the pictures for their commercial purpose.
Ms. Comstock. And as a result of the business and the
access that you described to us in your statement, you believe
that is how you came to the attention of Liu Chao Ying in the
summer of 1996?
Mr. Chung. That is correct.
Ms. Comstock. OK. And you have told us that it was in June
1996 that you first met her; is that correct?
Mr. Chung. I do not understand this question.
Ms. Comstock. I was wondering if you first met Liu Chao
Ying in June 1996.
Mr. Chung. That is correct.
Ms. Comstock. I just wanted to show your passport records.
I believe you received a copy of the exhibits also. This is
exhibit 1, where it shows your passport records with you
entering Hong Kong and going between Hong Kong and Macau
throughout June 5th and June 8th.
[The exhibit referred to follows:]
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Mr. Chung. That is correct.
Ms. Comstock. Is that around the time when you believe you
first met Liu Chao Ying?
Mr. Chung. That is correct.
Ms. Comstock. OK. I would note for the record that there
was also some marks in your passport where you were also in
China or Hong Kong in late June, also.
Mr. Sun. Just for the record, Mr. Chung has a hearing
problem. He has a problem hearing in one of his ears. That is
why he is having some difficulty.
Ms. Comstock. Let me know if I need to speak up.
As you explained, you brought Liu Chao Ying to several
events in July 1996. I wanted to show you a record that is
exhibit 2, that is a July 16th memo. It is a memo from your
company, from your general manager at that time, Irene Wu. It
indicates that you were going to take Ms. Liu to a dinner at
Mr. Eli Broad's House, is that correct?
[The exhibit referred to follows:]
[GRAPHIC] [TIFF OMITTED]58752.248
Mr. Chung. That is correct.
Ms. Comstock. Now, this document from your company shows
that under the Broad dinner, it does say Broad dinner, but we
understand that to be the Eli Broad dinner held in July 1996,
you were the one who was bringing Liu Chao Ying to this event,
correct?
Mr. Chung. That is correct.
Ms. Comstock. I would just note for the record that your
name is listed first there, and then the third name is Ms. Liu
Chao Ying, vice president, China Aerospace International
Holding, Limited.
Mr. Chung. That is correct.
Ms. Comstock. That would be Ms. Liu, correct?
Mr. Chung. That is correct, yes.
Ms. Comstock. And your assistant, Irene Wu, who drafted
this document, also indicated you would give the passport
numbers for Ms. Liu and another of the foreign guests. That is
on the bottom here. It says, ``I will give you the passport
numbers for Mr. Yiu and Ms. Liu.'' Was that the normal practice
you had when you brought the foreign guests to these events?
Mr. Chung. Yes.
Ms. Comstock. They asked to you provide the passport
numbers?
Mr. Chung. Yes, sometimes. Yes.
Ms. Comstock. Now, you told us that you had also given Ms.
Liu your Hong Kong bank account when she had requested it at
this time on this visit in July 1996, sometime during that
visit, is that correct?
Mr. Chung. That is correct.
Ms. Comstock. You also set up a company, Marswell
Investments, with Ms. Liu Chao Ying, in anticipation of going
into business with her?
Mr. Chung. That is correct.
Ms. Comstock. I wanted to show you on the screen now
Marswell documents. This is exhibit 3. This is a certificate
with your name on it, Johnny Chung, and then there is a second
certificate that has Ms. Liu's name, it says Chao-Ying Liu on
it, and it shows both of you incorporating this Marswell
Investment Co. in California in 1996?
[The exhibit referred to follows:]
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Mr. Chung. That is correct.
Ms. Comstock. Now, you said when Ms. Liu left the company
in late July, originally she was going to go back to Hong Kong
but she ended up going to Beijing, is that correct?
Mr. Chung. That is correct.
Ms. Comstock. OK. Now, she told you that she had to see her
father in Beijing, is that correct?
Mr. Chung. I asked my former general manager, Irene Wu,
where did she go. She said she went straight back to Beijing.
As I know, she is going back to Hong Kong. Later on when I went
back to Hong Kong, I asked her, and she said I went straight
back to Beijing, talked to my father.
Mr. Burton. Did you know at the time, Mr. Chung, that her
father was the former head of the People's Liberation Army? Did
you have any knowledge of that?
Mr. Chung. When people, one gentleman introduced her to me,
of course he said, the gentleman introduced her to me, he said
her father is the most high ranking General, the General of the
Army. This I know.
Mr. Burton. So you knew when she was going back to talk to
her father, she was going back to talk to somebody very high in
the government who had been the head of the People's Liberation
Army?
Mr. Chung. I said the father and also, yes, Mr. Chairman.
Mr. Burton. OK, thank you.
Ms. Comstock. Now, on August 7th you traveled back to Hong
Kong with your daughter and a friend of hers?
Mr. Chung. Yes, ma'am.
Ms. Comstock. I wanted to show you your passport records
that we have as exhibit 4 show you entering Hong Kong on August
7th.
[The exhibit referred to follows:]
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Mr. Chung. Yes.
Ms. Comstock. And then several days after you were there,
you said you got a call on August 11th--Ms. Liu contacted you,
and I wanted to show you exhibit 5 is your passport records of
August 11th. These passport records indicate that you left
China on August 11th and then entered and departed Macau in
route to Hong Kong and then you entered Hong Kong.
[The exhibit referred to follows:]
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Mr. Chung. That is correct.
Ms. Comstock. When Ms. Liu called you, she said she had an
important person for you to meet and you were going to have a
dinner in Hong Kong, correct?
Mr. Chung. Yes, ma'am.
Ms. Comstock. Does this exhibit 5 here reflect the route
that you had to travel with Ms. Liu in order to get to Hong
Kong?
Mr. Chung. Yes.
Ms. Comstock. OK.
Mr. Burton. As I understand it, you were staying with a
friend when you were there at that time, is that right?
Mr. Chung. That is correct.
Mr. Burton. And Ms. Liu contacted you. How did she know
where you were staying?
Mr. Chung. I was there traveling. I take my daughter and
her friend in Macau frequently for one date. Macau is like a
street close to Taihe. Then I enter into China, Taihe, with my
business friend. And his telephone rings. Mr. Chairman, this is
what the gentleman, the name I cannot talk about it here by the
instructions of the Department of Justice for the ongoing
investigation.
This gentleman's telephone was ringing, and he gave it to
me, part of the phone, and said ``Ms. Liu Chao Ying call you.''
Mr. Burton. The point I am trying to figure out in my mind
is, did you tell her you were staying there?
Mr. Chung. She know that--the day we arrived in Hong Kong,
there are so many people who I took over here for that event,
they all entertaining my daughters and me at the one event.
Mr. Burton. So Liu Chao Ying knew where you were staying?
Mr. Chung. Yes. She knew I am on my way to Macau in China.
Mr. Burton. Thank you.
Ms. Comstock. Did Liu Chao Ying also know the person you
were staying with, personally?
Mr. Chung. Yes, ma'am.
Ms. Comstock. Now, you described the meeting that you had
with General Ji and Liu Chao Ying, it was in the basement of a
restaurant?
Mr. Chung. Yes, ma'am.
Ms. Comstock. OK. And when General Ji came in, he went
through the kitchen instead of coming through a door the way
you had come in?
Mr. Chung. Yes, ma'am.
Ms. Comstock. Could you describe General Ji to us? Were you
able to identify him in order to tell the Justice Department
who he was or what he looked like?
Mr. Chung. When I fully cooperated with the FBI and the
Department of Justice, they show me a dozen pictures. Before
they showed me the pictures, they asked me the description of
the General Ji, and I told them that. When they showed me the
pictures, within 2 to 3 seconds, out of the 10 pictures I pick
it up, 2 of them. One is the picture I know, 50-some years old;
one is the picture of 20-30 some years old. And, yes, I know
him.
Ms. Comstock. OK. So you were able to pick out the pictures
from the group of pictures that the FBI showed you?
Mr. Chung. In 2 or 3 seconds.
Ms. Comstock. They indicated to you that you indeed had
picked out General Ji's picture?
Mr. Chung. That is correct.
Ms. Comstock. Now, you had testified--could you just tell
us again what General Ji said to you at that dinner, at the
conclusion, about the $300,000?
Mr. Chung. Yes, that is correct. I am going to say it in
English first, and I am going to use the Chinese exactly what
he said to me, and we have the interpreter over here to
translate it.
At the abalone restaurant, he said to me, ``I like your
President very much.''
The Interpreter. We like your President very much.
Mr. Chung. We would like to see him reelected.
The Interpreter. We hope to see him reelected.
Mr. Chung. I will give you $300,000 U.S. dollars.
The Interpreter. I will give you $300,000 U.S. dollars.
Mr. Chung. You can give it to the President and the
Democrat party.
The Interpreter. You can give it to your President and the
Democratic party.
Ms. Comstock. Now, when Ji said that to you, you did not
make any objections about anything he said?
Mr. Chung. Inside my heart, after that point, he said he is
Mr. Xu. I said to myself at that moment, who the hell this guy
is? Who do you think you are? I didn't say it. Inside my heart
I say that.
Ms. Comstock. Now, when you returned home that evening, the
friend that you were staying with, you told us that you asked
him if he knew who General Ji was, and he told you also that he
was an important person?
Mr. Chung. Yes. He write it down on a small piece of paper
with a name. I show it to my friend in Xhuhai, and I asked him
who he is. It is what she said, who he is. And my friend told
me that, yes.
Mr. Burton. One of the things that was of interest to me
is, and this is an opinion that I want to get from you, you
said I think in your statement that Liu Chao Ying showed
deference to General Ji. Can you describe how you felt that,
because it is very important that we understand who was making
the $300,000 contribution and who was making the decisions on
how it was to be spent.
Mr. Chung. To answer your first question, Mr. Chairman, as
a businessman in the room, you would know who is more important
when you see who is talking and who is following the order. And
I can see clearly he is the boss or he is the superior. And
then he told me that, after that time, after that abalone
restaurant. In my heart, I said to you already, I don't know
who this guy is. ``Who the hell you are?'' I said to myself,
and later on I found out. Up to this point, I still didn't
receive anything yet.
Mr. Burton. But you did get the clear impression, very
clearly, that General Ji was in charge and that he was going to
be the intermediary between you and General Ji?
Mr. Chung. That is correct.
Ms. Comstock. I just wanted to get to those bank records. I
want to show you exhibit 6, which shows again--that is when you
said you met with General Ji again. Again, your passport shows
you leaving China, I believe you said you were in Xhuhai and
again entering Hong Kong. It was at this second meeting where
General Ji turned to Liu and told her, ``I will wire $300,000
to your account,'' and she was to wire it to you, is that
correct?
[The exhibit referred to follows:]
[GRAPHIC] [TIFF OMITTED]58752.253
Mr. Chung. That is correct.
Ms. Comstock. I am showing you exhibit 7 on the screen.
This is your Overseas Trust Bank account record that was
provided to the committee recently. You had said on this
morning that Liu Chao Ying called you and said she was putting
money into your account. I guess I would direct your attention
to the third entry down where it says--it is 14 August 1996. It
has a transaction for a deposit of approximately $2.3 million
Hong Kong dollars?
[The exhibit referred to follows:]
[GRAPHIC] [TIFF OMITTED]58752.254
Mr. Chung. That is correct.
Ms. Comstock. And my understanding is that is the
equivalent of $300,000 U.S. dollars; is that correct?
Mr. Chung. That is correct.
Ms. Comstock. And prior to receiving that deposit that Liu
Chao Ying facilitated, your account showed only a balance of
approximately $1,068 Hong Kong dollars, is that correct, up
there on the second line?
Mr. Chung. That is correct.
Ms. Comstock. And that would be the equivalent of
approximately $150 in U.S. dollars?
Mr. Chung. That is correct.
Ms. Comstock. And then again, showing you another bank
record that you had provided to us, exhibit 8, again from your
Overseas Trust Bank Limited account, this document is a wire
transfer report which provides more detailed information on the
wire and it shows the ordering customer of the wire was Liu
Chao Ying; is that correct?
[The exhibit referred to follows:]
[GRAPHIC] [TIFF OMITTED]58752.255
Mr. Chung. That is correct.
Ms. Comstock. Now, after Ms. Liu had wired this money, you
had asked her to come over to see you that day on August 14th?
Mr. Chung. That is correct.
Ms. Comstock. And it was on that----
Mr. Chung. She ordered me in the early morning.
Ms. Comstock. It was on that occasion that she had
mentioned others who had been receiving money, Mr. Middleton
and Mr. Young. You told us she made a reference to them, you
felt to assuage you into keeping the money; is that correct?
Mr. Chung. Yes.
Ms. Comstock. All right. And when she said that, she seemed
to know who Mark Middleton was? You had not raised his name,
she raised it first?
Mr. Chung. I can feel she know her--she know him, I am
sorry.
Ms. Comstock. You knew Mark Middleton to be a former senior
White House aide with business contacts at that time in Asia?
Mr. Chung. I know he used to work in the White House. I met
him twice in the White House when he was employed by the
Clinton administration.
Ms. Comstock. OK. And when she mentioned a Mr. Young, a
Boeing representative, she didn't give you a first name of that
Mr. Young?
Mr. Chung. No.
Ms. Comstock. And you don't know who that Mr. Young is?
Mr. Chung. No, I don't. In the way we talk about it, nobody
in Chinese, they say Mr. Chung, Mr. Lin, Mr. Young. Very few
times you got to the first name.
Ms. Comstock. Now, on a separate occasion back in February
1996, you told us a Mr. Pai, who was a business associate also
of yours, told you something about Charlie Trie. Could you tell
us about that car ride in February 1996?
Mr. Chung. A gentleman of the branch manager of China
Construction Co., the branch manager in Beijing, Mr. Pai Yung,
Pai is the last name, at the one Chinese restaurant after we
finished the dinner, he drove me back to my apartment in
Beijing.
At one point he said to me, ``Do you know Mr. Charlie
Trie?'' In Chinese, he said. I said I do. He is one of the
Chinese-Americans, like me. ``And do you know he is a good
friend with your President?'' I said yes, I know. And he asked
me, ``Do you know he asked my government for $1 million to give
it to the President and Democrat party?'' And my eye turned to
this way, and from that point, no more further conversation.
Just keep driving.
Ms. Comstock. Now, you had told us you had also seen a
picture of Mr. Trie and Mr. Middleton in, was it the office of
Mrs. Pai's business associate, or some connection with Mrs.
Pai's business associate?
Mr. Chung. When I was down there in southern China at the
Citicorp, when I was there one of the businessmen, Mr. Hur, and
I went to their office. I see the pictures, and I also see the
company brochure with Mark Middleton and Charlie Trie and this
gentleman, Mr. Hur, was on the couch, and taking pictures
together.
Ms. Comstock. All right. Now, also returning back to when
you had that dinner, that first dinner with Liu Chao Ying and
General Ji on August 11th, you said Liu Chao Ying had mentioned
Charlie Trie in that meeting. From her talking about Charlie
Trie and saying you had a better brochure than Charlie Trie,
did you have the impression that Liu Chao Ying knew Charlie
Trie?
Mr. Chung. She know him, in my impression.
Mr. Burton. Let me change subjects here. You said that in
early 1996 you were in Beijing in the middle of the night. You
got a telephone call from a Cui Bao Chien.
I had difficulty with the names. He was connected with the
Great Wall Manufacturing Co. He asked you to come to a karaoke
bar that night?
Mr. Chung. That is correct.
Mr. Burton. When you got there, you were introduced to
Robert Luu, the man you thought made these overt threats to
you?
Mr. Chung. That is correct, Mr. Chairman.
Mr. Burton. At that time, was Liu Chao Ying ever mentioned
or General Ji ever mentioned?
Mr. Chung. Never.
Mr. Burton. Never. The FBI worked with you throughout the
entire process, is that correct, and they wired you so that
they could pick up the conversations?
Mr. Chung. Not only wired me, but also got a hidden camera.
Mr. Burton. A hidden camera. OK. Another one of my
colleagues is going to go into more detail on this subject, but
I wanted to ask you about ties that Mr. Luu may have had to
Chinese intelligence sources. Our investigators have been told
that Mr. Luu failed not one but two lie detector tests, one
administered by the government and another was administered
independently, and the private polygraph exam indicated Mr. Luu
showed deception when asked if he had ties to the PRC
intelligence services.
Do you know of any ties that Mr. Luu had to the PRC or
General Ji or anybody else in the Chinese Government?
Mr. Chung. According to the instruction by the FBI, I posed
him a lot of questions. One of the questions I asked him, ``Do
you know General Ji?'' He clearly showed to me he know him. I
pointed out, again under instruction of the FBI, ``Do you know
Gunyang?'' which is equal to Liu Chao Ying. He said he know
him.
Mr. Burton. He used a Chinese term about Liu Chao Ying
which indicated to you that he had to know Liu Chao Ying
because that term had been used before; is that correct?
Mr. Chung. That is correct. I tried to, under the
instruction of the FBI, I tried to find out who is behind him.
I had to find it out who is behind him. That is my instruction.
And he come out with the Gunyang, which is very important words
to this committee. When they say ``gunyang'' in Chinese, which
means a country girl, I think nobody dared to call Chao Ying
country girl. I gave her that name at the Willard Hotel.
Mr. Burton. You gave her the name?
Mr. Chung. I gave her the name.
Mr. Burton. When he used the term ``country girl'' in
Chinese, you knew exactly who he was talking about?
Mr. Chung. Bingo.
Mr. Burton. Her connection, of course she was a subordinate
or showed deference to General Ji, who was the head of Chinese
military intelligence?
Mr. Chung. Under the instruction of the FBI, I tried to
push him. At the very end of the few meetings, I got that
impression, he know him.
Mr. Burton. I understand that. What I am talking about is
when you first met them at the restaurant in Hong Kong, she
showed deference to General Ji?
Mr. Chung. I am sorry, yes.
Mr. Burton. And you knew that he was superior to her and
she knew he was the boss.
Mr. Chung. That is correct.
Mr. Burton. So when you heard Mr. Luu talking about her and
also you were trying to find out about General Ji, you knew
there was a connection there between her and the Chinese
military intelligence?
Mr. Chung. That is correct.
Mr. Burton. Now, you mentioned a Commander Li. Did she ever
or did Mr. Luu ever identify who Commander Li was?
Mr. Chung. The whole entire undercover operation, I always
wanted to find out who Commander Li is. He never told me who
Commander Li is. I didn't know who Commander Li is.
Mr. Burton. But Commander Li was associated with a veiled
threat that you might be in trouble if you talked, right?
Mr. Chung. In the very soft talk in Chinese, but a very
hard reaction, I can feel as my life, my family life, is in
great dangers if I talk.
Mr. Burton. This is very important. The FBI concluded from
the wiretap, the wire that you were wearing, that there was a
definite possibility that you might be in danger?
Mr. Chung. That is correct, Mr. Chairman.
Mr. Burton. And they put you into a motel with your family
for 21 days?
Mr. Chung. On top of each other.
Mr. Burton. On top of others. On top of each other. You
were sleeping on top of children. They didn't even give you a
big hotel room?
Mr. Chung. They tried. They did treat me well. I want to
put in the record, they treated me very well.
Mr. Burton. But the point is, it is not just your
imagination that Mr. Luu was telling you if you talked, you
might be in real jeopardy, and so might your family, and you
felt there was a strong connection back with the Chinese
Government?
Mr. Chung. That is correct.
Mr. Burton. And the FBI concurred because they did put you
in protective custody?
Mr. Chung. That is correct.
Mr. Burton. I think we have a couple more documents.
Mr. Chung. Mr. Chairman, I would like to put in some more
information here. After that time, New York Times also come out
pretty much at the same time, New York Times came out with the
article about Liu Chao Ying with that $300,000, and all of this
coming up at the same time, I think that is why we conclude
myself and my family is in great dangers, and they move us in
the middle of the night.
Mr. Burton. I see. OK.
Ms. Comstock. I just wanted to cover just a few more
documents that you had addressed regarding some of the events.
In October 1996 you said you had brought General Ji's wife and
son to the ``Back to the Future'' event. I want to show you
exhibit No. 9 which shows an invite. These were provided from
your documents. Was that the invite for that October event that
you took Mrs. Ji and her son Alex too?
[The exhibit referred to follows:]
[GRAPHIC] [TIFF OMITTED]58752.256
Mr. Chung. That is correct.
Ms. Comstock. And then exhibit 10 was the letter that you
had discussed, that Don Fowler wrote to Liu Chao Ying inviting
her to the Democratic National Convention. Was that the letter,
had you asked Don Fowler to write that letter for Liu Chao
Ying?
[The exhibit referred to follows:]
[GRAPHIC] [TIFF OMITTED]58752.257
Mr. Chung. I asked for that letter. They gave it to me. I
gave it to Ms. Liu Chao Ying.
Ms. Comstock. He wrote this and a number of other letters
for you?
Mr. Chung. Yes.
Ms. Comstock. Thank you.
Mr. Burton. Thank you, Mr. Chung. We now yield to Mr.
Waxman for 30 minutes.
Mr. Sun. Mr. Chairman, would it be possible to have Mr.
Chung take just a short break?
Mr. Burton. We will stand in recess for 5 minutes so Mr.
Chung can take a break. Is that OK with you?
Mr. Waxman. Yes.
[Recess.]
Mr. Burton. The committee will reconvene.
Mr. Sun, I believe you had one little clarifying statement
you wanted to make real quickly regarding something that was in
the testimony.
Mr. Sun. Yes, Mr. Chairman. Thank you, Mr. Chairman.
Just briefly in connection with Mr. Chung's statement,
minor clarification. When he was discussing his--how he knew
Mark Middleton, he indicated a name we need to clarify. The
context of the statement was where one of his associates had
called to ask him a favor and to call Mr. Middleton to
intervene on behalf of this issue involving a Swiss bank
account. The person who contacted him was an individual by the
name of Liu Shu Min, who is a Chinese Embassy official that Mr.
Chung had been introduced previously. So it was Mr. Liu who
called Mr. Chung and asked him to call Mr. Middleton. And then
the name that was actually used by Mr. Chung, Larry Liou,
spelled L-I-O-U, was one of his AISI shareholders who on a
separate occasion had asked Mr. Chung to call Mr. Middleton for
a favor. So we have two Lius there, and we needed to correct
the record in that regard.
Just another couple of quick things. One is with respect to
the money that came from Ms. Liu in August 1996, I believe Mr.
Chung indicated that the money came into his overseas trust
limited account and that just to clarify the record, a portion
of the money was sent to his Cal Fed account in August 1996,
and then more money from that account was later brought over at
a later time. Just to clear that up.
And I believe Mr. Murphy has one other thing as well.
Mr. Murphy. Mr. Chairman, apparently there was a little
miscommunication in the discussions regarding Charles Parish.
It wasn't Mr. Parish's girlfriend that was brought to the
event. It was Mr. He's girlfriend. I wanted to make sure that
was clear.
Mr. Burton. Anything else? If not, Mr. Waxman, you are
recognized for 30 minutes.
Mr. Waxman. Thank you.
Mr. Chung, welcome back to our committee. This is the first
time you've testified in a public hearing, but it's not the
first time you've appeared before Members of Congress. In
August 1997 you went before members of the Senate Governmental
Affairs Committee and talked to them, and in November--on
November 14, 1997, you had a meeting with members of this
committee and our staff; isn't that correct?
Mr. Chung. That's not correct. My attorney talked to the
Senate committee.
Mr. Waxman. You did not talk to the Senate committee?
Mr. Chung. I did not come to Washington, DC.
Mr. Waxman. You did come before us?
Mr. Chung. I did come before you.
Mr. Waxman. And your attorney went before the Senate
committee talking to them in hopes that you might get immunity.
Is that your understanding?
Mr. Chung. That's what I understand.
Mr. Waxman. During your interview with us, you took us
through a chronology of your interactions with political
officials, and I want to ask you about some of them. But before
I get to talking to you about Liu Chao Ying and General Ji, I
want to ask you about 1995 because I was so impressed when you
met with us and you talked about your trip to China in 1995
where you were talking to Chinese Government officials about
releasing Harry Wu who was a political prisoner. You spoke with
real passion. You felt Mr. Wu was being held improperly and
illegally. I'd like you to share your views with us and share
with us your experiences in dealing with Mr. Harry Wu.
Mr. Chung. In late June 1995, one gentleman called Mr.
Charles Parish, who we know who he is, he called me from the
Urumchi Sinkiang province of China, and he called me at my
office. I ask him, why you go there? It's small countryside. He
said, I'm here for a purpose. Well, I thought you had some
friends. He indicated a friend who I did take them to the March
1995 Presidential radio address, Mr. Sun. I asked Mr. Sun to go
to the hotel, give him the basket of fruit and the flower.
Ended up with Mr. Sun was followed by the Chinese policeman.
Two days later I saw by watching the CNN Breakout, I saw Mr.
Wu, Harry Wu's wife was cry out at Capitol Hill. I said to my
wife, I hope I can do something about it. Would you cry out if
I was arrested by someone overseas? She said, I would do the
same thing.
I feel sympathy about that. The first one I contact then
California Democrat Chairman Bill Press, a cohost of the
Crossfire today. I raise my issue to Mr. Bill Press. I talk to
him. He helped me out to get through with Chairman Don Fowler,
and I talked to Don Fowler about Harry Wu issue. Then--the
reason why Mr. Charles Parish was in Urumchi Sinkiang, he was
ordered by the State Department looking after Mr. Wu.
Mr. Waxman. Mr. Chung, let me interrupt you. Rather than
going through every detail of what you said to us, I recall
that you talked to a man in China who was equivalent to the
head of the President's National Security Council and made an
appeal to him to have Harry Wu released, and you never got the
credit, but you felt that you deserved the credit for Harry Wu
getting out of Chinese prison. Is that accurate?
Mr. Chung. I never asked the credit for the release of
Harry Wu, but I did what I think is the right thing to do as
American citizen.
Mr. Waxman. Well, do you think you played an important role
in getting him released?
Mr. Chung. At that time I did ask all of those Chinese
business connection what I can do, and I did meet with the Vice
Minister of Foreign Affair Li Wa Chu and the gentleman Mr. Liu
who I know from the TV Chinese news now, he's the second person
in the Chinese Embassy right now in Washington, DC.
Mr. Waxman. You remember calling the Democratic National
Committee and telling them that you were responsible for
getting Harry Wu out?
Mr. Chung. I remember I talked to several people in the
National Democratic Committee. I will go. I will try to release
him. They show me the support.
Mr. Waxman. Well, a Carol Khare was quoted in an L.A. Times
article as saying you told her you managed to get Harry Wu out
of jail, and you were very pleased with yourself.
Mr. Chung. The moment I had the meeting over with the
Minister, the Vice Minister, Li Wa Chu, the Minister of Foreign
Affair, then I--that afternoon I came back to my hotel room. I
make several phone calls. I told them, Carol Khare, I told the
secretary to Bill Press. I also talked to a person back there,
Muriel. Now I remember the name because one of the U.N.
investigator told me, she was the volunteer working at the
White House, the First Lady's office. I told him that at the
end of the conversation, the Chinese told me, the Vice Minister
told me, if you maintain, which is United States, maintain one
China policy, and you will not give the President of Taiwan,
give away another visa and ask me if the First Lady coming to
woman conference in Beijing, pretty much--pretty soon we will
release, we'll do something. And that all I know.
I did pass on all this information to whatever I can. I did
try to call the President's office at the White House, Betty
Currie, and it sounds like nobody answer the phone at that
time. Later I figured out the President was on vacation in
Wyoming and Montana.
Mr. Waxman. Were you trying to call the White House to tell
them that you had arranged to get Harry Wu out of prison?
Mr. Chung. Those few people at the First Lady's office,
they know that.
Mr. Waxman. Let me ask you another question. There were
some people you called and you were pretty excited because you
thought he was going to get out, and, in fact, 10 days later he
did get out.
Mr. Chung. Mr. Congressman, we are talking about two
different phone call. One is--this is the event after the
conversation, and the other phone call is when I was in
Shanghai, the day Harry Wu was released.
Mr. Waxman. Ms. Khare at the DNC claimed that you called
and said that you were responsible for getting Harry Wu out.
Mr. Chung. That was the second phone call. I call him up
when I was in Shanghai, the same day Harry Wu was released.
Mr. Waxman. When you met with us 2 years later in 1997, you
told us explicitly--you never publicly took the credit, but you
told us that you felt you were responsible in getting Harry Wu
out.
Mr. Chung. At that time I did whatever I can at my own
expense.
Mr. Waxman. I'm not in any way criticizing you. You tried
to do what was a good thing. You tried to get this man out of
prison, and I commend you for that. But when you met with us,
you said, it's because of me that Harry Wu was out.
Do you know this gentleman sitting to my right, Mr. Lantos?
Mr. Chung. Yes, I do.
Mr. Waxman. Do you remember what he said to you at that
meeting?
Mr. Chung. I don't take a note. I'm sorry. Would you remind
me?
Mr. Waxman. You don't recall what he said to you? You
don't?
Mr. Chung. I'm sorry, Mr. Lantos, the only thing I
remember, you asked me speak louder.
Mr. Waxman. He also said something else. He said to you
that he thought it was absolutely preposterous that you would
think that you were responsible for getting Harry Wu out of
prison in China since so many of the Congressmen, Senators,
human rights groups, people at the highest levels of diplomatic
channels, were trying to get him out. He thought it was
preposterous, but it was clear that you at that time genuinely
believed you were responsible for Harry Wu's release.
Now, it's interesting to me that the conversation, which I
thought was a pretty harsh one from Mr. Lantos in 1997, you
can't remember, but the conversations you had in 1996 you seem
to remember in a great deal of detail.
Let me ask you about another matter.
Mr. Sun. There were 20 people in that meeting, Mr. Waxman.
Mr. Waxman. There was one person, Mr. Lantos----
Mr. Chung. May I respond to this question?
Mr. Waxman. It seems to me you should be able to remember
when somebody attacks you.
Mr. Chung. So many people in the room at the first time for
me to come to the Congress, and so many people jump up of
questions another one, and so many people there in the room,
and sometimes I didn't really pick it up how many questions
asked me simultaneously.
Mr. Waxman. So you don't recall?
Mr. Chung. That's what I recollect to you.
Mr. Waxman. Let me get a clarification.
Mr. Chung. I will remember you asked me the question today
because this is one on one.
Mr. Waxman. Well, that was one on one, too. But in 1997,
you said you did not meet with the Senate. But you did meet
with the Senate staff in Los Angeles, didn't you?
Mr. Sun. I'm sorry, you were asking him----
Mr. Waxman. Whether he met with Senate staffers in August
1997.
Mr. Sun. He may have been introduced to a couple of
staffers, but he didn't actually meet or talk with them beyond
that.
Mr. Waxman. That's very peculiar because I have notes from
the Senate staffers at the meeting. Was it only with you, Mr.
Sun?
Mr. Sun. There was a meeting in my office, Mr. Waxman. Mr.
Chung was present. We did an attorney proffer. Mr. Chung was
there to sort of correct and clarify anything that the
attorneys might have said incorrectly or that might have been,
from his standpoint, inaccurate.
Mr. Waxman. I consider that an interview with him. And
there were statements made by him at that meeting; were there
not?
Mr. Sun. I don't think we need to get into a semantic
discussion about it. Mr. Chung was present in my office when
some of those discussions took place. He wasn't present for all
of them.
Mr. Waxman. I have these notes, and we'll go over them
later.
Mr. Chung, you gave a television interview to NBC News in
August 1997. This interview made headlines across the country
because you alleged Energy Secretary Hazel O'Leary insisted on
a contribution before scheduling a meeting with you and some
Chinese guests. Because of your statement, the Attorney General
of the United States launched an investigation of Secretary
O'Leary. This committee investigated your allegations and
actually deposed Ms. O'Leary. In the process she had her
reputation brought into question. She had to bear a large
financial toll both in terms of attorney fees and opportunity
costs.
Do you know what both the Attorney General's investigation
and our investigations concluded? I want to read to you what
the Attorney General said. She said, ``there is nothing about .
. . the substance of the meeting that suggests that there was
anything inappropriate about the meeting. . . . The
investigation developed no evidence that Mrs. O'Leary had
anything to do with the solicitation of the charitable
donation.'' In fact, Attorney General Reno further stated,
``[Mr. Chung's] belief that Mrs. O'Leary knew about the
solicitation . . . amount[s] to little more than speculation.''
Would you give that same answer that you gave to Mr. Brokaw
if it were asked again, and that question was whether you had
to give money as a requirement to meet with her?
Mr. Chung. I only talked to the government what the fact
is, and what they want to do with that fact is out of my
control.
Mr. Waxman. I want to ask you about another subject you
discussed in an interview with NBC News, and this dealt with
Maggie Williams, who is the Chief of Staff of the First Lady.
You said there was a check for $50,000 made out to the DNC, and
you delivered it to Ms. Williams. There's nothing illegal about
this, but you also went on to say that she and other White
House staff actively solicited the contribution.
The distinction is important because if she actually
solicited the contributions, it's illegal. If she received the
check and then passed it on to the appropriate party, it's not
illegal. Tom Brokaw recognizes the critical distinction, and in
his interview he said, ``but who suggested the donation? That's
a critical point because it's against the law for Federal
employees to solicit donations.'' Your answer was that Maggie
Williams and her assistant Evan Ryan solicited the
contribution. As Tom Brokaw reported, ``Chung insists Mrs.
Clinton's aides' Evan Ryan and Maggie Williams raised the idea
of a donation to defray the cost of a White House Christmas
party.'' Do you remember that exchange with Tom Brokaw?
Mr. Chung. I told the fact to Tom Brokaw. I told the fact
to the government investigator.
Mr. Waxman. As a result of that allegation, both this
committee and the Senate Governmental Affairs Committee
investigated Ms. Williams. She was deposed by this committee
for over 10 hours. She then testified at a public committee
hearing for nearly 5 hours. She spent hundreds of thousands of
dollars on attorney's fees. Neither committee found any support
for your allegation, and when you met with us in November 1997,
you no longer insisted that Maggie Williams solicited the money
from you. Instead you said the discussions preceding the
delivery of the check were with Evan Ryan, not Maggie Williams,
and you conceded that the idea of making the contribution may
have originated with you.
Can you appreciate the harm you caused to both Ms. O'Leary
and Ms. Williams through these erroneous allegations?
Mr. Chung. I told the fact to the investigator of the
government. What they want to do with it, if you want to ask me
one more time, Mr. Congressman, I'd be very happy to give you
the detail minute by minute.
Mr. Waxman. Well, you gave your statements, but they were
inconsistent. You said at one point that they solicited the
contribution but then later backed away. That's a significant
point.
I want to return to your statements in 1997 to both the
Senate and the House committees. When you appeared before the
committees, did you understand that it was a Federal crime
under 18 U.S.C. section 1001 to provide false information to
Congress?
Mr. Chung. I told the Congress the facts at that time at
the advice of my attorney.
Mr. Waxman. Did you understand it was important to tell the
truth and that it could be a crime not to tell the truth to
members of staff and Members of Congress?
Mr. Chung. I told the truth at the advice of my counsel.
Sometime, Mr. Congressman, I like to talk to you about I was--
my attorney was under negotiation at that time.
Mr. Waxman. I want to review some of your statements and
ask whether you stand by those answers. After your interview
with the Senate, your attorney reviewed the notes from the
meeting, and he indicated in a letter that they were correct.
Your attorney said, ``Chung could `deflate the foreign source'
by proving that he made his donations entirely out of his own
money.'' Do you still stand by that statement, that you made
the contributions out of your own money?
Mr. Chung. I do. I do.
Mr. Waxman. Your attorney also said, ``Mr. Chung had not
been a conduit for foreign money; The funds he donated were
ones over which he had total control.'' Do you stand by that
statement? And I think you said it as well in your statement.
Mr. Chung. It is in my statement.
Mr. Waxman. Mr. Sun, as your attorney, gave an interview,
and he denied that the Beijing Government was trying to use you
as an agent. Do you stand by that statement?
Mr. Chung. At that time, yes, I do.
Mr. Waxman. When you met with this committee in November
1997, you told us essentially the same thing. You said you
received no money from foreign governments. You stand by that
statement?
Mr. Sun. Excuse me. Congressman, when do you attribute that
statement?
Mr. Waxman. This is November 1997.
Mr. Sun. This was the meeting where members of this
committee and staff agreed that this was an off-the-record
interview. We had taken the fifth amendment because of the
pendency of a criminal investigation. I did about 70 percent of
the talking, as I recall, during that meeting, but I reminded
both members of this committee and the staff that where there
was a pending Department of Justice criminal investigation,
there were certain matters that we could not get into because
of that investigation, and I want to make that clear for the
record. And you're referring to notes, notes that I would note
for the record that I have not seen, that as I understand it
were provided to the Department of Justice----
Mr. Waxman. I only have a limited amount of time. Let me
stipulate. This was a meeting that you're referring to, and
these were notes that I took and my staff took and they were
all put together and all corroborated by each other. Now, the
notes you had from the Senate meeting you did get a chance to
review. You did not get to see these. But you, Mr. Sun, said,
Senator Specter's suggestion that Chung's money was from
foreign sources was not accurate. Mr. Chung, do you still hold
that the statement that your money was from foreign sources was
not accurate?
Mr. Sun. In the context of the donations or money that he
received, Congressman? That's a clarification I would seek,
because Mr. Chung in his statement said he received a lot of
money from foreign sources. What he disputes is the notion, I
think, raised by Senator Specter that all these donations were
earmarked and that Mr. Chung was a conduit for these foreign-
sourced donations. I just want to clarify that.
Mr. Waxman. So you stand by that statement that the sources
may have been foreign sources, but the contributions were from
Mr. Chung?
Mr. Chung. That's correct.
Mr. Waxman. A very important issue is what General Ji said
to you, and I'm confused about this because your statement
seems so unclear. On page 23 you say that, ``I emphasize that
except for the General, no one told me to give money to the
Democrats.'' This seems to imply that General Ji told you to
give money. But I don't see from your testimony where General
Ji told you to give money to Democrats.
Let me go to page 17 and 18 of your testimony. There you
describe in four sentences what General Ji told you. I want to
go through each of these sentences. He said, one, ``we really
like your President.'' Is this a directive for you to give
money to the President?
Mr. Chung. That's the way he told me; he liked your
President.
Mr. Waxman. That's all he meant. The first full sentence
is, I like your President.
Mr. Chung. We like your President.
Mr. Waxman. The second sentence, ``We hope he will be
reelected.'' Was that a directive for you to give money to the
President?
Mr. Chung. That's the way he feel. He liked.
Mr. Waxman. He liked him?
Mr. Chung. He like--we--they like to see him be reelect.
Mr. Waxman. Then he said, ``I will give you 300,000 U.S.
dollars.'' What about this statement? Was that a directive to
you to give that money to the President?
Mr. Sun. I think he's having trouble with the word
``directive.''
Mr. Waxman. Was he ordering you? Did he simply say you can
give the money, or did he say that you had to give that money?
Mr. Chung. He will give me the money.
Mr. Waxman. He will give you money, and you can give it to
the President. Did that mean you had to give it to the
President, or was it your money?
Mr. Chung. It's my money. It's my money. At that
conversation, I told you that I don't know this guy who the
hell is. He called himself Mr. Xu.
Mr. Waxman. Why were you so insulted about that? What
offended you about that statement? Why were you angry about it?
Mr. Chung. I been talked to these four sentences more than
50, 60 times. The sentence is there.
Mr. Waxman. He was telling you how to use the money?
Mr. Chung. That's the impression I get from him.
Mr. Waxman. You felt it was your money?
Mr. Chung. I feel the promise from Liu Chao Ying. Makes no
difference what the other businessmen would mean. You see my
pattern all along with the 2 years.
Mr. Waxman. Well, he's telling you you can make a
contribution. He's not saying you shall make a contribution.
And moreover, you have later in your testimony two other facts
that seem to be unclear to me. First, on page 21 you say that
Ms. Liu said you could use the money for your business. Why
would Ms. Liu contradict an expressed directive from General
Ji?
Mr. Chung. Speculated.
Mr. Waxman. You're speculating?
Mr. Sun. I think he's trying to say, Congressman, he
doesn't know what she was thinking in that regard.
Mr. Waxman. She said you can use the money for our
business, didn't she?
Mr. Chung. That what she told me at the Willard Hotel.
Mr. Waxman. It was after the conversation with General Ji?
Mr. Chung. Yes.
Mr. Waxman. General Ji said, here's $300,000. Did he say, I
want you to use all of it for the Democrats and President
Clinton?
Mr. Chung. He didn't say--he only said, you can give--use
to the President and the Democrat party. You got to translator
over here to translate.
Mr. Waxman. I've heard the translation. If somebody says
you can use the money for the President's reelection, and he
knew you were already giving a lot of money to the President
for his reelection, and he knew that some of the foreign money
you received you used for contributions, doesn't that simply
acknowledge that you were going to give some of that money?
Mr. Chung. In statement you can also see that I was
encouraged by Liu Chao Ying when she told him how disappointed
I am with the business relationship back there in Beijing early
on, and later on she said--she also indicated to him about how
loyal I am to the Democratic party, how loyal I am to the
President of the United States, and in a sense I always talk to
everybody I met. More money I make, more money I can give. Not
only talk to the investors or shareholders, but I also talk to
the DNC and White House official.
Mr. Waxman. So, in fact, you thought of it as your money.
You used that money to pay your taxes. You used it to pay your
mortgage. You used it to even pay the salary of General Ji's
son who worked for you, and you donated--now the Senate says
$20,000 of the $300,000; you've been saying $35,000 of it to
the Democratic Committee or President Clinton; is that right?
Mr. Chung. The money I received, it's my money. I can use
it whatever way I want to use it.
Mr. Waxman. Well, you don't maintain in any way that the
President or the Democratic party knew that money was coming
from General Ji? You didn't tell them that, did you?
Mr. Chung. No, I don't.
Mr. Waxman. Well, it strikes me that one theory in all of
this is the kind of theory that the chairman outlined, how all
of this is part of a conspiracy. It seems to me a very strange
conspiracy if the Chinese Government is telling you to give
$300,000 through General Ji's comments. You get $300,000 to the
Democratic party, but he doesn't care whether the Democratic
party or the President knows it was his money. He doesn't seem
to care that you only gave $20,000 of it and not $300,000 of it
to the President. If that's the way they've run their
conspiracy, it seems to me a very strange notion of a China
plan to reelect the President. Do you think it's part of a
broad conspiracy?
Mr. Chung. In my statement I said the people who I deal
with it.
Mr. Waxman. If we have a conspiracy, it has to be
constructed on three legs. The first leg is that you were a
conduit for foreign contributions, but you told us in 1997 and
again today you were never a conduit for foreign contributions.
Your testimony is that you had control over the money you
received and were not directed to give the money to the DNC, so
that's the first leg that doesn't stick.
Mr. Chung. I always intend whatever time, how much, and
when to go. I make this decision by myself.
Mr. Waxman. It's your decision because it's your money to
decide.
Mr. Chung. It's my money.
Mr. Waxman. The second leg is you received the money from
the Chinese Government as part of a plot to influence United
States elections, but in 1997 and again today you said you
never received the money from a foreign government. Is that
accurate?
Mr. Chung. I consider it money I received--you talk about
Liu Chao Ying's money. It will be sent in Liu Chao Ying's
money.
Mr. Waxman. You don't know whether it came from the Chinese
Government or from her businesses?
Mr. Chung. The statement over here is when she--when
General Ji said to Liu Chao Ying, my statement to you, I don't
know the source behind it.
Mr. Waxman. And the third leg would have to be that you're
just one piece of a comprehensive scheme by the Chinese
Government to funnel money into the American political system.
Now, you made statements regarding Mr. Middleton, Mr. Young,
Mr. Trie to demonstrate this scheme, but you have no knowledge
about the actual facts about those three individuals. You're
passing on something you heard about them; is that right?
Mr. Chung. That's secondhand information, I know.
Mr. Waxman. In fact, while we couldn't corroborate a lot of
what you told us because it's stuff you heard and we couldn't
check it out, we were able to check out about Mark Middleton,
and Mark Middleton denied the statement that was attributed to
you in the press. You said Ms. Liu told you that Mark Middleton
received $500,000 from Mr. Huang of the Singapore Group to help
China. We checked to see----
Mr. Barr. Excuse me. Mr. Chairman, it's our understanding
that Mark Middleton has taken the fifth, and he hasn't
testified as to anything. I think this is a mischaracterization
of testimony.
Mr. Waxman. This is my time.
Mr. Barr. That doesn't mean you can mischaracterize
testimony in legal proceedings, Mr. Waxman.
Mr. Burton. The gentleman will state his point of order.
Mr. Barr. Point of order is I believe the gentleman from
California has mischaracterized testimony. Would the chairman
clarify whether or not Mark Middleton has taken the fifth and
has, in fact, not testified as to any of this?
Mr. Burton. Was it the----
Mr. Waxman. Mr. Chairman, I have a letter in my hand.
Mr. Burton. Was it Mr. Middleton's attorney or Mr.
Middleton?
Mr. Waxman. I have a letter from Mr. Middleton's attorney,
and in it he says, as counsel for Mark Middleton, I'm writing
to respond to your request--this is to Ms. Comstock--of May 6
``that Mr. Middleton agree to be interviewed by the Committee
about the disgraceful and false accusations that the Committee
has been leaking to the media over the last several days.'' It
goes on to say that he did not receive the money. In fact, we
were able to check through your staff that money----
Mr. Burton. Excuse me. I'll give you additional time, but
the fact is Mr. Middleton has still taken the fifth, and this
letter was from his attorney; is that correct?
Mr. Waxman. That's correct.
Mr. Barr. I appreciate that proper characterization of the
testimony despite the effort to mischaracterize it by the
gentleman from California.
Mr. Waxman. There's no effort to mischaracterize anything.
Mr. Burton. Put 2 more minutes on the clock for the
gentleman from California.
Mr. Waxman. Mr. Sun has been able to speak in the name of
Mr. Chung, his client, and Mr. Middleton's attorney is able to
speak for him, and, in fact, the Department of Justice
concluded that Mr. Middleton agreed to--well, this letter says
Mr. Middleton agreed to cooperate fully with the Department of
Justice in its investigation. He was thoroughly interviewed.
The Justice Department concluded that the allegations that Mr.
Middleton ever received any funds from sources in the People's
Republic of China were without foundation.
My point is that what we have are these statements. There
was a statement about Ambrose Young, and then I believe Mr. Sun
said, well, maybe it wasn't the right Mr. Young. What we're
seeing is a lot of hearsay, a lot of statements that are made,
a lot of speculation with reputations that can be ruined as a
result of the speculation, just as a great deal of harm was
done to Hazel O'Leary and Maggie Williams and Ambrose Young,
who, by the way, is a big Republican contributor. It seems to
me if this is part of a case, we ought to look at actual facts.
We don't have actual facts to back up all of this.
I think there's a lesson to be learned from all of this. I
think a lot of it is attributed to you, Mr. Chung. You came
here as an immigrant. You worked hard as a busboy at the
Holiday Inn. You became an American citizen. You had 18
computer stores. You went out and made $3 million between 1994
and 1996. At some point you discovered that if you contribute
money to politicians, you get pampered by them. You get access
to them. This is not unique to the Democratic party. It's also
part of what the Republicans do. It's part of this corrupting
campaign finance system that we have, and in getting this
access you took photos, and with these photos you impressed a
lot of people that you were an insider, a player. And that
meant more business came to you, and that money came from
foreign businessmen who wanted to do business with you because
they thought you were an important person in the United States.
That seems to be what impressed Ms. Liu and General Ji. Isn't
that a correct assumption?
Mr. Chung. Yes.
To answer your question for two things. Government,
Department of Justice, and the FBI find me as a very credible
witness. And the other issue is in my statement to you, Mr.
Waxman, this is a system I didn't create. You guys don't like
it, change it. Don't shout at each other. Let's change it.
Mr. Waxman. Isn't it possible that General Ji and Liu Chao
Ying gave you that money because they wanted to impress you
because you were an important person in the United States? They
wanted to go into business with you? They wanted to impress
you? They wanted you to be helpful to them in their business
operations?
Mr. Chung. Yes, I do. I think so. I want to do business
with people around you, too, because you're important, too.
Mr. Waxman. Well, I think your experience is helpful in
illustrating not international intrigue, but how defective our
system is.
Thank you, Mr. Chairman.
Mr. Burton. Thank you, Mr. Waxman.
Before I yield to Mr. LaTourette, yesterday Mr. Waxman and
I received responses to interrogatories and subpoenas directed
to Mr. Ambrose Young. We wanted to clear up whether the Hong
Kong Boeing representative mentioned by Liu Chao Ying might
have been Ambrose Young. I ask unanimous consent that Mr.
Young's responses be included in the record.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED]58752.258
[GRAPHIC] [TIFF OMITTED]58752.259
[GRAPHIC] [TIFF OMITTED]58752.260
[GRAPHIC] [TIFF OMITTED]58752.261
Mr. Burton. These responses make it very clear that Mr.
Ambrose Young could not possibly have been the individual in
question, and I'm surprised Mr. Waxman mentioned this knowing
he would unfairly be slandering Mr. Young because we----
Mr. Waxman. Reserving the right to object. I only mentioned
it for the purpose of showing how careless, reckless
accusations can be made, as they were by Mr. Chung in the
meeting he had with our staffs, which turned out to be
inaccurate as it related to Mr. Chung, as have other statements
that have been made by Mr. Chung turned out to be inaccurate.
They are harmful, and it seems to me a pattern of
misunderstandings and speculations that Mr. Chung is quick to
say to the press and it turns out often later that they're
without any factual basis.
Mr. Burton. I understand.
Mr. Waxman. I have no objection to the request. I think it
ought to be in the record.
Mr. Sun. Mr. Chairman----
Mr. Burton. Mr. Chung never said it was Ambrose Young, No.
1. No. 2, Mr. Ambrose Young did cooperate with our
interrogatories, as you well know, and when you were talking
about Mr. Middleton, he has taken the fifth and not cooperated
with this committee.
Did you have a comment?
Mr. Sun. Just briefly. Mr. Chairman, we agree with Mr.
Waxman that there have been times and instances where things
might be taken out of context or extrapolated. I think this has
happened to Mr. Chung on a number of occasions where he was
attributed to having participated in events or contacts with
people such as Secretary Dalton of the Navy or the Cosco matter
that he had nothing to do with. So there are instances when
that sort of thing happens where people, whether it's the media
or whether some members of this committee or somebody wants to
spin something out of control.
Mr. Chung does have some language barrier issues that he's
trying to struggle with in understanding some of the questions
here today. We talked about that during the break. I think he
wanted me to say that he's trying to cooperate with the members
of this committee. He's not trying to say anything more than
what was told him in these meetings. He's not trying to spin it
into whether this was some nefarious scheme or not. He's just
here to tell you what happened to him, nothing more, nothing
less.
Mr. Burton. Thank you.
Mr. LaTourette.
Mr. LaTourette. Thank you very much, Mr. Chairman.
Mr. Chung, I want to talk to you today about a fellow who
you mentioned in your testimony, Charles Parish from the U.S.
Embassy in China.
Before I do that, just three things occurred to me as a
result of some recent exchanges. I think I for one and other
members of the committee would love to hear from Mr. Middleton
in the future if he wanted to chat about what it is you have
had to say in your testimony today.
Two, I was more than interested in the observations about
perjury and lying under oath before Congress, because perjury
and lying under oath have sort of received a new brushup in the
recent months to those of us who have spent our time in law
enforcement before coming to Congress.
And third, your testimony reminded me that nothing good
ever happens at a karaoke bar. I will tell you that. Charles
Parish, who you talked about, my understanding is that Mr.
Parish was employed in our Embassy in Beijing from 1994 to
1996, that our Ambassador, who's recently been in the news,
Ambassador Sasser, actually asked for him to be recalled amid
allegations that he was engaged in a pattern of handing out
visas, permits to visit the United States, under some
suspicious circumstances. In fact, it's my understanding his
office was sealed.
In interviews at least Mr. Parish reported he came back
home expecting the worst, that he was going to be investigated.
A little earlier in reference to Mr. Middleton, there were
references to completed investigations by the Department of
Justice, and I think that Mr. Parish was expecting the same.
Surprisingly he came back, and, again, rather than being
investigated or given maybe the Canada desk or a desk that
doesn't pose a security threat to the United States, it's my
understanding he spent some time reviewing security clearances
for individuals from Iraq and Iran who wanted to visit the
United States, and recently he retired in 1998 in response to
some questions that were asked relative to a fundraiser that I
believe you and he attended in California in 1995.
I want to talk to you, first of all, about visas. I think
that people in this country take for granted that visas to
other countries are pretty freely given, except apparently when
the investigators from this committee wanted to go to China to
ask questions about campaign finance reform. Is it your
experience that visas granted for Chinese nationals to visit
the United States of America are as freely given? Is that an
easy process?
Mr. Chung. Very difficult.
Mr. LaTourette. And I think you mentioned during your
written statement and also your testimony that after you became
acquainted with Mr. Parish, you, in fact, took dozens of people
to Mr. Parish to assist you in getting visas to the United
States of America. Is that an accurate observation?
Mr. Chung. That's correct.
Mr. LaTourette. How many dozens of people would you say
that was?
Mr. Chung. A little bit more than 2 dozen, I believe.
Mr. LaTourette. More than 2,000 people?
Mr. Chung. No, 2 dozen; between 25 to 30 people.
Mr. LaTourette. Two dozen, I'm sorry, 25 to 30 people.
Was the purpose of obtaining the visas for most of those
people, were they business associates that were coming hoping
to conduct business in the United States?
Mr. Chung. Yes. It was those people that come over here to
visit, including the most famous March 1995 radio address.
Mr. LaTourette. And did any of the individuals, these 25 to
30 individuals with whom you dealt with Mr. Parish to get a
visa to visit the United States, did they wind up attending
political functions of either party in 1995/1996?
Mr. Chung. Not all of them. Some of them.
Mr. LaTourette. How many of the some of them, if you know?
If you don't know, that's fine.
Mr. Chung. I didn't calculate. I'm sorry, Mr. Congressman.
Mr. Sun. We'd be happy to provide that to the committee if
you'd like at a subsequent time.
Mr. Chung. We're talking about 4 years ago.
Mr. LaTourette. Did they attend those functions as your
guests?
Mr. Chung. Yes.
Mr. LaTourette. Did you pay their way, or did they make
contributions to be accepted at these political fundraisers I
assume that's what we're talking about?
Mr. Chung. I pay the way for them.
Mr. LaTourette. Were the political fundraising activities
limited to one political party or another? Was it all
Republicans or all Democrats, fundraisers that you went to?
Mr. Chung. They all Democrat fundraiser.
Mr. LaTourette. Were they all associated with the
President's re-election campaign in 1996, or were there other
events?
Mr. Chung. The answer to the question is the President was
there. That's why they go.
Mr. LaTourette. In your testimony you indicated that you
first met Mr. Parish because the head of the Haomen Beer Co.
had a visa problem; is that right?
Mr. Chung. No. I think he have the visa, one entry visa
first. He attend by himself before he meet with me here in
Washington, DC, and he tried to get a second multiple entry
visa. I try to help him out.
Mr. LaTourette. Is that when you met Mr. Parish for the
first time when you went to try and help Mr. He get a
multientry visa?
Mr. Chung. That's correct.
Mr. LaTourette. How is it that you came to meet Mr. Parish?
Did you walk into the Embassy and say, I need to see the head
guy in charge, or were you directed to see Mr. Parish?
Mr. Chung. I was in China first time on August 28, 1994. I
was there, and I have the chance to meet with the commercial
attache of the U.S. Embassy. I don't remember the gentleman's
name who work in the commercial division. I certainly call him
up, and I ask him is there any way he can help one of my
business associates who I want to do business with; I indicate
Haomen Beer, if you can help me out to get this gentleman to
get appropriate way to get a visa. And he introduced Charles
Parish to me at the commercial section of Embassy.
Mr. LaTourette. After that time you and Mr. Parish at least
had a number of conversations? You took a number of people to
him relative to visa applications to the United States?
Mr. Chung. That's correct.
Mr. LaTourette. You indicated in your opening statement
that at one point Mr. Parish approached you and asked if you
could assist in getting a computer tutor for his secretary at
the United States Embassy; is that right?
Mr. Chung. Yes, that is--he's the secretary in the Embassy,
and I have the temporary office at the Beijing, and then they
came to my office for tutoring on the computer, yes, sir.
Mr. LaTourette. You paid for the expense of that tutor, and
it was about $500; is that right?
Mr. Chung. $500 U.S. dollars, but in Chinese currency.
Mr. LaTourette. You also indicated that Mr. Parish came to
you and wanted you to pay some school expenses for seven
students, and you did that to the tune of $7- or $8,000; is
that correct?
Mr. Chung. That's correct. I give a copy to the FBI
already.
Mr. LaTourette. Is there any question in your mind that Mr.
Parish knew that you were, in fact--that there was going to be
an expense involved with the students' training and also the
computer tutor? Somebody had to be paying the bill; is that
right?
Mr. Chung. That's correct.
Mr. LaTourette. Was that discussed between you and Mr.
Parish? Is there any question in your mind that he knew that it
was you that was paying the bill?
Mr. Chung. He knew I was paying the bill.
Mr. LaTourette. During this time while you're paying for
student expenses for seven students that he brings to you and a
computer tutor to train on the computer, you were still going
to him to try and get your friends and business associates
admitted through the visa process to the United States of
America, and he's granting 25 or 30 of those; is that right?
Mr. Chung. That's correct.
Mr. LaTourette. I want to talk to you a little bit about
Mr. He and the Haomen Beer Co. for a minute. During your
testimony you made a correction about this grocery bag of
money. I think your written testimony said on at least one
occasion you witnessed this. Then you went back. Was it only
one occasion that you saw a grocery bag of money with 10
Chinese passports delivered by you to Mr. Parish? Was that just
one time?
Mr. Chung. That was a late night and the one at my
apartment at Beijing. Mr. He and one of his associates come to
my apartment in which I and Mr. Parish have dinner together.
And then they was in my apartment, and somebody knock the door.
In come is Mr. He and one associate with a shopping bag.
Mr. LaTourette. And in the shopping bag, it is my
understanding, is cash and also some passports of Chinese
nationals?
Mr. Chung. I said to the government is the Chinese money
one bundle and a half.
Mr. LaTourette. But still it's money in Chinese national
passports? Is that correct?
Mr. Chung. That's correct.
Mr. LaTourette. Mr. He asked if you would take it to Mr.
Parish for the purpose of obtaining visas for these individuals
to enter the United States of America; is that right?
Mr. Chung. He didn't say the kind of question, but
impression is that he give it to me. I open it. I say, I don't
want to do anything with it. I hand it over to Mr. Parish.
Mr. LaTourette. But you gave the shopping bag full of money
and passports to Mr. Parish?
Mr. Chung. I say I don't want to do anything with that.
Mr. LaTourette. Is the Haomen Beer Co. a state-owned and
operated beer company? Is it run by the Chinese Government? Is
it a shareholder of the Communist Chinese Government?
Mr. Chung. Mr. Congressman, up to today I still want to
find it out. Is it state-owned or private-owned because what I
know they sold to the French company, and after that they have
a picture on Christmas warehouse, an advertisement on the
street of Beijing and make them sell to French company very
well.
Mr. LaTourette. Is what you're saying that the Haomen Beer
Co. to promote beer sales was putting up a picture of Mr. He
and the President and the First Lady of the United States
saying, drink Haomen Beer because I'm here with the President
and First Lady of the United States? Is that what the
advertisement looked like?
Mr. Chung. I didn't see it, but I see it on CNN. It's a
picture there with the two giant bottle of beer. That's what I
see. I didn't see it exactly.
Mr. LaTourette. You also had the opportunity to take Mr.
Parish to a fundraising event called the Southern California
Presidential Gala on September 21, 1995; did you not?
Mr. Chung. That's correct.
Mr. LaTourette. If we have the technology, you faxed a
letter to someone named Karen Sternfeld of Clinton-Gore 1996
indicating that you were going to have a group of people that
you were bringing to this function. Do you recognize this fax?
Mr. Sun. Do you have the date of that letter?
Mr. LaTourette. It's September 19, 1995, fax from AISI to
Karen Sternfeld.
Mr. Chung. I seen this one before, yes.
Mr. LaTourette. Regardless, table 2, guest No. 8 is Mr.
Charles Parish. You took Mr. Charles Parish, a Foreign Service
officer, to a Clinton-Gore 1996 event on September 21, 1995?
Mr. Chung. That's correct.
Mr. LaTourette. You also took him on a tour of the White
House and First Lady's office; is that right?
Mr. Chung. That's correct.
Mr. LaTourette. Can you explain to the committee why it is
you took an employee of United States State Department, a
Foreign Service officer charged with issuing visas to permit
Chinese nationals into the United States of America, to a
Presidential campaign event in 1995? How did that happen?
Mr. Chung. Well, in one way it is a party. I want everybody
to be there, and I want to say thank you to the gentleman who
been helping my business associate to come to United States and
to impress him, too.
Mr. LaTourette. You eventually stopped having dealings with
Mr. Parish after the shopping bag full of money incident when
you determined, though, that perhaps he and Mr. He were up to
things that you didn't want to be a part of; is that right? You
stopped doing business with Mr. Parish in late 1995 because you
didn't like the way the things smelled or looked; is that a
fair observation?
Mr. Chung. That's correct.
Mr. LaTourette. Thank you very much, Mr. Chung.
Thank you, Mr. Chairman.
Mr. Burton. Thank you, Mr. LaTourette. We'll be revisiting
the Parish issue in the future.
Mr. Lantos.
Mr. Lantos. Thank you very much, Mr. Chairman,.
Mr. Chung, we've been spending over 3 years on you. I'd
like to spend a few minutes I have on China because I think the
subject is a bit more interesting. You have had your 15 minutes
of fame, and it's sort of obvious that you are a very minor and
insignificant puppet in a vast global drama orchestrated by the
Communist regime in Beijing. This drama is played on multiple
stages simultaneously. It's a 10-ring circus and you are just a
tiny sideshow. So let me deal with the main issue.
It's obvious that Communist China is using whatever
mechanism is at its disposal to advance its interests, and your
small part in it fits into the picture perfectly.
Mr. Chung. I'm sorry, Mr. Lantos. I have the same problem
with you with the ear--hearing problem, I'm sorry. Thank you
very much.
Mr. Lantos. I will come closer. Occasionally the Chinese
engage in a charm offensive, and occasionally they engage in a
fury offensive. Six years ago they were engaged in a charm
offensive when they were trying to get the 2000 Olympics for
Beijing. I introduced the resolution opposing that, which the
House passed on July 26 overwhelmingly by a vote of 287 to 99.
Imagine how bad it would be if we would now be looking at the
prospect of holding the year 2000 Olympics in Beijing where the
United States Embassy has been treated so abominably in the
last few days.
We occasionally go through a fury phase. We are in one of
those fury phases. It, of course, to a very large extent is a
phony fury. The Beijing leadership did not show much empathy
for the deliberately killed hundreds of Chinese citizens at
Tiananmen Square whom this regime killed, but the regime is
suddenly profoundly exorcised over the accidental killing,
which we all regret, of four Chinese citizens in Belgrade.
So I think it's important to keep our eyes on the ball.
This ruthless Communist dictatorship is using all the means at
its disposal, military, economic, political, cultural,
financial, you name it, to advance its interests. And you with
your financial dealings were a tiny part of a very complex
mosaic, and while some may be fascinated by the nuances of what
you did, what you didn't, some of us are more interested in the
broad picture.
It seems to me you have testified that no one in the
administration knew that any of the funds that you provided
came from Chinese sources; is that correct?
Mr. Chung. To put it in the record, I told the people in
the White House, I told the people in the DNC, more money I can
make doing business with the Chinese people, more people I can
donate to the DNC. That's all I said. To answer your question,
I did not tell them face to face the money from Chinese source.
Mr. Lantos. At no time did you tell anyone that the funds
you were providing came from the Chinese Government; is that
correct?
Mr. Chung. That's correct.
Mr. Lantos. Thank you.
Since you didn't tell them this, they clearly did not know
that.
Is it also true that when this thing emerged, every dime
that you gave was returned; is that correct?
Mr. Sun. Are you asking him a question, sir?
Mr. Chung. Is that a statement or is that a question? I'm
sorry.
Mr. Lantos. I'm asking you to confirm what I'm saying. Did
the DNC return all the funds that you gave them?
Mr. Chung. They returned the money to me.
Mr. Lantos. All right. So, A, they did not know what the
source was; and, B, since there was a question mark concerning
it, they returned it. That's all we have concerning this item.
I tell you what I think is happening at the moment in terms
of the Chinese fury offensive because it's not a naive
offensive. It is just 3 weeks before the 10th anniversary of
Tiananmen Square; Tiananmen Square, which has indelibly labeled
this despicable Communist regime as one of the worst violators
of human rights on the face of this planet, and what they are
about is changing the subject. They are changing the subject,
which they will not succeed in doing so because my
distinguished Republican colleague Congressman Wolf and I later
this week are introducing a resolution commemorating the
martyrs of Tiananmen Square, the hundreds of Chinese citizens,
students, and others who passionately believe along with all of
us here in a free and open and democratic society. They killed
those people, and they killed them deliberately. They killed
them purposefully. They were not killed like the four Chinese
citizens who were killed in Belgrade by a tragic accident. They
were murdered by this regime, and the current fury offensive is
designed to divert attention to what is really going to happen
in 3 weeks. The whole world will commemorate Tiananmen Square,
and they would like people to talk about other things.
Now, this will be a very expensive exercise for China.
Foreign investment in China will plummet. Travel from the West
to China will vanish, and the Chinese people will play an
enormous price for this Communist regime overreaching. They
could not gracefully accept the public apology of the President
of the United States. They could not gracefully accept the
public apology of all the American people. We profoundly regret
the death of the four people who were killed in Belgrade, but
we reject, resent, and repudiate the outrageous practice of
this government of pretending that this action, so clearly a
mistake, was deliberate and of holding back from the Chinese
people the knowledge, A, that this was an accident, and, B,
that the whole campaign against Milosevic is designed to
protect and preserve the human rights of 1,800,000 people, 90
percent of whom have been driven out of their homes, thousands
of whom have been massacred by Communist thugs, vast numbers of
women mass raped by them, hundreds of communities torched to
prevent these people from returning to Kosovo. Your role in
this whole thing is a terribly minor little role.
You may or may not have been used to funnel funds to
political parties. You claim that the funds were yours, so you
were not a conduit. People will debate this for a long time.
But I think it is extremely important before we get fixated
on the importance of your activities, which if in fact you feel
that you were used as a tool were despicable, were despicable,
they are just part and parcel of a communist regime's broad
offensive against democratic societies. To them, the end
justifies any means, whether it is political contributions or
mass murder, and it is in this context, I believe, that your
testimony needs to be understood.
I yield back the balance of my time.
Mr. Chung. Mr. Chairman, I want to respond to the
distinguished Congressman.
Mr. Burton. Mr. Chung.
Mr. Chung. Mr. Lantos, I will remember your question to me
for my lifetime, for sure. For the Harry Wu issue, I know there
are so many people tried to rescue him, including him. I
congratulated you, I applaud you.
For me, to participate, to get Harry Wu out, as a part of
the American citizen that is inside me, if I have to do it
again, I will. Even he say that I will try to do the self-
serving. No, if it happened again, I will do whatever I can.
That is why I applaud you.
Thank you.
Mr. Lantos. Mr. Chairman, let me just say anybody who
participated, however marginally, in saving this true and
courageous man, deserves some credit, and to whatever extent
you contributed to that, you deserve some credit.
Mr. Chung. Thank you.
Mr. Burton. Thank you. Mr. Barr.
Mr. Barr. Thank you, Mr. Chairman.
Mr. Chung, focusing for just a few moments back on some
previous questions by Mr. Waxman with regard to your initial
meeting with General Ji, at which time, as you have testified
under oath, General Ji made essentially four statements to you:
One, we really like your President; two, we hope he will be
reelected; three, I will give you $300,000; and four, you can
give it to your President and the Democrat party.
It seems to me a reasonable presumption that when General
Ji made those statements, they reflected a certain intent on
his part; not necessarily on yours, but on his part. And it
seems to me that a reasonable person could conclude from those
statements and the fact that he did come through with the
$300,000, that he had an intent that at least part of that
money would be used to influence American politics in the
reelection of the President. That would be reasonable
presumption of his intent, correct?
Mr. Chung. That is correct.
Mr. Barr. And in fact, is it also reasonable to conclude
that the reason that you felt that your life was endangered and
the reason that the FBI provided protective custody for you was
because that was General Ji's intent and he was concerned that
you would be disclosing that to U.S. authorities as part of
your plea agreement? Would that also be a reasonable
conclusion?
Mr. Chung. That is correct.
Mr. Barr. Do you consider that your life was in danger in
1998 because of the leaked story that appeared in the New York
Times?
Mr. Chung. That is correct, and I am still looking out my
back every day.
Mr. Barr. Did you leak that information in any way, shape
or form to the New York Times?
Mr. Chung. No. I don't leak that information to the New
York Times.
Mr. Barr. And would it also be accurate that your attorneys
didn't leak that information to the New York Times?
Mr. Chung. We tried to stop them.
Mr. Barr. Exactly. Where do you think the information might
have come from that was leaked to the New York Times?
Mr. Chung. Mr. Congressman, if you find it out, would you
let me know?
Mr. Barr. Well, we would like the Department of Justice to
find that out. It would be very interesting to find out, one,
if they are concerned about it, because this is a very damaging
leak that endangered a very important witness, yourself; and it
may very well have come from the Department of Justice. So we
would be very interested in that, as I am sure you would be.
Mr. Chung. Mr. Congressman, that night I had to go to a
meeting with those people. My attorney told me, don't go. Maybe
you are in trouble, in danger. I talked to my wife, I talked to
my attorney again, and I talked to the FBI. I want to go
forward because I want the truth to come out.
Mr. Barr. Thank you. During your conversations that you had
with Mr. Luu, did he ask you about your family?
Mr. Chung. In the Chinese way, yes.
Mr. Barr. Was it in a way that relayed to you that he
wasn't really concerned about your family, he was telling you
something, that you ought to be concerned about your family?
Mr. Chung. That is correct.
Mr. Barr. And did he ask you about your family in the
context of hoping that you would not disclose information?
Mr. Chung. If you keep your mouth shut, you will be safe.
If you are talking, the thing is out of control. That is all I
recall.
Mr. Barr. You also mentioned an attorney that is connected
with Mr. Luu. Would that be Mr. Brockway, an attorney in Los
Angeles?
Mr. Chung. Mr. Luu gave me the business cards of Mr. David
Brockway in Los Angeles.
Mr. Barr. Did you have any meetings with Mr. Luu at which
Mr. Brockway was there?
Mr. Chung. That is the meeting, yes, with the FBI agents
around in that private club, with a body wire.
Mr. Barr. And did Mr. Luu also suggest to you that you
should use Mr. Brockway as your attorney?
Mr. Chung. Yes. Not only that, he also said my attorney,
Mr. Sun, is also the earphone for the President, so don't hire
him. Get rid of him. Personally, I don't think so.
Mr. Barr. And did Mr. Luu also say if you hired Mr.
Brockway, the attorney's fees would be taken care of?
Mr. Chung. That is one of the questions I asked. He said,
well, it has been taken care of. Don't worry.
Mr. Barr. And did Mr. Luu also tell you that he received
money from Beijing?
Mr. Chung. In the conversation, yes.
Mr. Barr. In your discussion with Mr. Brockway, the
attorney from Los Angeles, did Mr. Luu tell you that Mr.
Brockway had contacts at the Department of Justice?
Mr. Chung. That Mr. Brockway told me, he had the contact
with the Department of Justice.
Mr. Barr. OK. Mr. Brockway told you he had contacts high up
at the Department of Justice?
Mr. Chung. No. 3 at the Department of Justice.
Mr. Barr. The third senior position?
Mr. Chung. That is all I can recall, yes.
Mr. Barr. And did Mr. Brockway also tell you that he knew
the judge who would be sentencing you?
Mr. Chung. That is correct.
Mr. Barr. Was there also----
Mr. Chung. Mr. Congressman, which I don't believe.
Mr. Barr. But he made those representations to you.
Mr. Chung. Yes, that is correct.
Mr. Barr. Did he also mention to you, either Mr. Brockway
or Mr. Luu, a pardon, a possible pardon?
Mr. Chung. A Presidential pardon, if I keep my mouth shut.
Mr. Barr. And did Mr. Luu also mention the name of General
Ji, who was behind him?
Mr. Chung. It was under meetings, video and also the
wiretap, he mentioned that.
Mr. Barr. Did this Mr. Brockway also talk about having been
an attorney with the Watergate case or cases?
Mr. Chung. He mentioned to me he was an attorney for the
Watergate.
Mr. Barr. Did he mention anything more specifically than
that?
Mr. Chung. No. But maybe he think I don't know too much
about Watergate.
Mr. Barr. Excuse me just a moment, Mr. Chung.
During your meetings after the entry of your plea in early
1998, during those meetings that you had with Mr. Luu and with
Mr. Brockway, the FBI was aware of what was going on; is that
correct?
Mr. Chung. Yes, that is correct. Every move, every word I
said was under the instruction of the FBI.
Mr. Barr. So when you testified that Mr. Luu mentioned that
he was receiving money from Beijing and that General Ji was
behind him, the FBI knew that those conversations had taken
place, correct?
Mr. Chung. Yes. That is all on the videotape or audiotape.
Mr. Barr. So if somebody characterized to you the position
that the Department of Justice did not know that there was
evidence that money was coming from Beijing, that would be
incorrect, would it not?
Mr. Chung. Can you reframe your question a little bit more?
Mr. Sun. He is having a little trouble, Congressman.
Mr. Barr. If somebody said to you, ``Mr. Chung, the
Department of Justice didn't have any idea money was coming
from Beijing, did they?'' that would be an inaccurate
characterization. That wouldn't be true, would it? Because
they, through the FBI at least here, they knew there was
evidence money was coming from Beijing?
Mr. Chung. I did not know there was money coming from
Beijing for this issue or not, because I was under protection
at that time. If somebody told me it did come, the money go to
Mr. Luu, then the Department of Justice, they should know.
Mr. Sun. Were you asking about the money that Liu Chao Ying
gave to him? I think he is confusing the money that Mr. Luu
suggested to him that he could receive if he kept his mouth
shut, so there is a little confusion in his mind. During the
course of the conversations with Mr. Luu, that subject came up,
he could get some money if he kept his mouth quiet.
Mr. Barr. We do know, there is no confusion at least here
today in our discussion, that there was $300,000 that came from
overseas. We know that; is that correct?
Mr. Chung. Yes. Yes.
Mr. Barr. And we also know through your sworn testimony
that Mr. Luu told you that he was getting money from Beijing in
his discussions with you about providing an attorney, for
example?
Mr. Chung. That is correct.
Mr. Barr. So the fact of the matter is that since all of
this information has been relayed to the FBI, the Department of
Justice did know that money was probably coming from China?
Mr. Chung. That is correct.
Mr. Barr. I think so. Thank you very much, Mr. Chung.
Mr. Burton. The gentleman yields back the balance of his
time?
Mr. Barr. The chairman is correct.
Mr. Burton. Mr. Waxman, you have 10 minutes.
Mr. Waxman. I yield to Mrs. Mink.
Mrs. Mink. Thank you very much, Mr. Chairman.
As an Asian-American, I appreciate very much your
forthright statements today, and understand the difficulty of
having all of these questions fired at you, sometimes with
double negatives and so forth, it is very difficult to respond.
I wanted to start off my portion of the questioning by
underscoring what you said in your original testimony, and that
is, with the furor that arose out of the contributions that
were made to the Democratic National Committee following the
1996 elections, indeed Chinese Americans throughout the country
suffered gravely from false accusations, false intimidations,
false assumptions that their motives in participating in
political campaigns were somehow colored or connected to
devious arrangements, and the actions by the political parties
in giving weight to such inferences I found very, very
disconcerting.
For instance, their immediate reaction was to not accept
any contributions from any person that had an Asian sounding
name. Many people called my office very indignant about the
inferences that were being left by the people who were calling
them. So I can understand your great concern about what all
this scandal has meant for Asian Americans throughout this
country.
That carried forward during the debate of the campaign
reform measure which I strongly supported. But in the last
hours of our deliberations on the floor, they added a provision
in the House which said that the burden fell upon the candidate
to assure that there were no contributions being made by legal
residents. People who were legally admitted to the United
States were being forbidden to make campaign contributions.
That is how far the hysteria went.
So I can fully understand your concern about what all of
this has meant to all Chinese Americans, all Asian Americans,
throughout the United States. I wanted to concur very
vehemently with your views in that regard.
The personal difficulties that you and your family have
endured is also something which I think we have to share. The
reason for my making this statement is that I am confused with
all that has been said about your involvement in the 1996
period. What was it that the government finally, after all of
the investigations, all of the inquiries that were made with
regard to your participation, what was it that they finally
asked you to plead to, charge you with and find you convicted
and guilty of? Could you explain that to this committee?
Because I think that is important for the record.
Mr. Chung. There is two counts of campaign finance
violation. To use misdemeanor, to use my employee to give the
money to the DNC. I reimbursed them.
The other issue is the tax issue of 1995. I still try to
figure it out. I am not good in the money account. I still try
to figure out the tax violation.
And the other one is the bank fraud, for the mortgage, and
I tried to protect my family. And there is one Chinese Mafia
come after me for the money, after this all come out. And he
asked me to give that $200,000 to him. The gentleman is named
Peter K-H-E-N. If I don't give it to him, he will give my
family and will kill me, even put out a threat to my employee.
I made a mistake, because my name is too big on the news,
so I asked my wife. My wife is under my instruction to get a
loan. The house is already--get a loan, the house is already
paid off, and try to get the money as soon as I can to give to
this gentleman who tried to kill my whole family. That is all I
plead.
Mrs. Mink. Any of those charges that you were asked to
plead to, do they have anything to do with serving as a conduit
for foreign contributions to the Democratic National Committee
or any Democratic candidate?
Mr. Chung. No.
Mrs. Mink. Was there any allegation in any of these charges
to which you pleaded that had anything to do with any foreign
contribution coming from these officials that you met with in
Beijing, Hong Kong, wherever?
Mr. Chung. No.
Mrs. Mink. None of the allegations that you have finally
now been convicted of, and serving a probation, have anything
to do with all this that has been out in the press about your
connections with high-placed military people who gave you money
to give to the Democratic party and to the Democratic
candidates?
Mr. Chung. No.
Mrs. Mink. Was there, in any of the testimony that you have
given, to this committee or any other committee or the
Department of Justice, does it conflict in any way with the
testimony that you have given to us today that as far as you
were concerned, the $300,000 that you received was your money,
that you could do whatever you wished with it?
Mr. Chung. Yes.
Mrs. Mink. So you took that $300,000 and considered it a
business investment, is that correct?
Mr. Chung. That is correct.
Mrs. Mink. That was what the conversation----
Mr. Chung. Yes.
Mrs. Mink. That is what the conversation was between you
and Liu Chao Ying?
Mr. Chung. That is correct.
Mrs. Mink. So when the money was deposited in your bank,
you considered it a contribution from Liu Chao Ying or from
General Ji?
Mr. Chung. She told me that at the hotel. She is going to
invest in my company for the amount of $300,000.
Mrs. Mink. So your testimony is----
Mr. Chung. She wired to me, from her account to my account.
I consider that her money to me.
Mrs. Mink. There is proof and evidence that the funds that
were deposited in your account came from her.
Mr. Chung. That is correct.
Mrs. Mink. Now, the Senate committee report indicates that
based upon their review of contributions that you made--now, I
understand that this deposit was made in August 1996; is that
correct?
Mr. Chung. Ma'am, at that time I commingle a lot of money.
At that time I have two major--two big sums of money coming to
my account almost simultaneously, at the same time.
Mrs. Mink. It is about August 1996, is that correct?
Mr. Chung. That is correct.
Mrs. Mink. From the evidence that seems to be available,
there was no contribution that you made, that could be
attributed to you, to the DNC after August 1996 in the sum of
$300,000; is that correct?
Mr. Sun. Are you asking Mr. Chung about the amount after
August?
Mrs. Mink. Yes.
Mr. Sun. I think in his statement we have told the members
of both the majority and the minority there was $35,000 given
to the DNC on two separate occasions following the receipt of
the money from Liu Chao Ying. I think the bank records reflect
Mr. Chung received money from other business consulting clients
right in and around that same timeframe. So it is all sort of
mixed together. Although the money that was used for the two
events I just referred to, I think could be traced back to the
Liu Chao Ying money in Hong Kong. And then there was, I
believe, the John Kerry event in September 1996 as well. But
that was not to the DNC, that was Senator Kerry's reelection.
Mrs. Mink. The Senate report, which I have a page
reference, says that the FBI can only trace $20,000 of the
$300,000 to the Democratic National Committee. Do you say that
that statement in the report is incorrect?
Mr. Sun. Traced back to Liu Chao Ying's money?
Mrs. Mink. No, traced back to Mr. Chung as a contribution
after August 1996. We have already been told in this committee
that as far as he was concerned, the $300,000 was his to spend
in any way that he wished.
The report now indicates that only $20,000 of that money,
if any, went to the Democratic National Committee. In other
words, he did take $280,000 for the business investment
purposes which he understood that money was for. I am trying to
find out if that is accurate or not.
Mr. Sun. I am sorry to interject for Mr. Chung, because he
is not as familiar with the records. I believe we can clarify
that.
Following his receipt of money from Ms. Liu, Mr. Chung
attended the President's 50th birthday party in New York. I
believe on that occasion the records would reflect he donated
about $20,000, I believe. Then later on that month he attended
some events at the Democratic National Convention where I
believe there were two checks for $10,000 and $5,000
respectively.
It is during that same timeframe that Mr. Chung received
about a total of I think about $300,000 from other business
consulting clients, between August 14th and August 28th. So it
is in that timeframe that he makes these $35,000 and subsequent
donations. But I believe the records reflect it is $35,000 in
three separate checks.
Mrs. Mink. I think that what the report is trying to link
up is that specific $300,000 which he received from Liu Chao
Ying, and their assumption is they can only trace $20,000 of
that. What you have said is that there were other moneys coming
in to his account, some up to $300,000, out of which other
kinds of contributions could have been made.
I am simply trying to find some corroborative evidence,
since there has been some question as to the differing
testimonies that appear for Mr. Chung, trying to find
corroborative evidence somewhere to emphasize that none of the
contributions from Liu Chao Ying specifically went to the
Democratic National Committee because of instructions that he
had received in China.
Mr. Chung. That is correct.
Mrs. Mink. So your answer to my question is that none of it
went directly to the DNC because you felt you had been
instructed to do so?
Mr. Sun. I think I understand the question. I will try to
explain it to Mr. Chung.
[Discussion off the record.]
Mrs. Mink. I didn't think, Mr. Chairman, I asked such a
difficult question. I might have to withdraw it.
Mr. Sun. Congresswoman, actually it is a good question
because the bank records, which we only recently were able to
get ahold of, sort of answer your question. I was trying to
remind Mr. Chung, who is not as familiar with these records,
the lawyers and the investigators and the staffers are
intimately familiar with them, we sort of try to articulate it.
Mrs. Mink. If the Chair would allow the attorney to respond
to my question, if that is all right?
Mr. Burton. You are out of time. I think it is important we
clarify this. We have a chart that I think we can put up on the
screen that might help you with your question. Would you put
this chart up on the screen for Mrs. Mink?
If you look at the chart, I will let him answer this
question, it shows the $300,000 going, and then the money was
given to Mr. Chung on August 14th. On August 15th he wired
$80,000 to his account in California Federal Bank, account in
Los Angeles, and then on the 19th there was--19th and 27th
there was $30,000 transferred to another account. On the 18th,
28th and 29th there were three separate contributions totaling
$30,000. If you like, I can give you a copy of this so you can
get a close look at it.
[The information referred to follows:]
[GRAPHIC] [TIFF OMITTED]58752.262
Mrs. Mink. I would like to have my question answered. The
chart doesn't really refer to the essence of the question that
I felt should be answered.
Mr. Chung. I would like to answer your question. I also
took Mr. Li and Mr. He and the other people, at that time I
received some money from them. I took those two different
people, go to the New York Radio City President's 50 years old
birthday. I donate the money, which is I donate Ms. Liu Chao
Ying's money for different people, and I also received money
from them. I also took those people to the DNC Convention,
which I donate Liu Chao Ying's money to that event, which I
also received from a lot of people.
It is very confused for me at that time. I was really
commingling all of the money together. I am not taking Liu Chao
Ying's money to go to an event, I am taking Liu Chao Ying's, I
am using Liu Chao Ying's money with other people. But I also
receive a consulting fee from those people. That is what I
tried to explain to you. It was really commingled together.
Mrs. Mink. I guess my time is up.
Mr. Burton. If you like, we can go back. I think your side
has another 10 minutes in just a minute. Maybe Mr. Waxman can
yield to you.
Mr. Hutchinson.
Mr. Hutchinson. I thank the Chair, and I am grateful for
you holding these hearings. I believe this is certainly an
important issue, and I appreciate Mr. Chung's testimony today.
Also, I want to comment that I thought Mr. Waxman's
comments at the very outset were certainly appropriate, that
any time we have a witness that is making serious statements,
accusations, after pleading guilty to an offense, credibility
should always be an issue. I think we should listen very openly
to the testimony. I think the most important thing is not
pointing fingers as to who is right or who is wrong, but as to
what we can do from a legislative standpoint to correct any
abuses in the system.
For that reason, I am very grateful to the chairman for
sponsoring the Conduit Contribution Prevention Act, addressing
a serious loophole allowing foreign contributions into our
political system. I am delighted to express my appreciation to
the chairman for that effort.
I think that the testimony that I have heard today raises a
number of concerns. Certainly the first one is whether our
national security has been compromised in any way by covert
efforts of a foreign government or groups to influence our
political process. I think there is a legitimate question as to
whether the flow of soft money into parties affects national
policy, particularly critical decisions by the Commerce
Department that approves the transfer of technology. That is a
serious question that we need to address as the Congress.
Then I think we have to look at it from a legislative
standpoint as to whether there are additional areas that need
to be plugged, improvements in the law, to make sure that the
system works appropriately. I noticed that Mr. Chung, you
indicated in your testimony that the system is set up so that
if you donate money, you can participate.
I understand that you as an Asian-American have seen that
part of the system, which is not very pretty. But I want you to
know also there is another system in America that works, and if
you go to my State, you will see Asian-Americans there coming
to political functions, knocking on doors for candidates, that
are participating, perhaps not the level that you sought to
participate, but there is active, open participation at the
grassroots level.
The problem we are seeing is not at the grassroots of
American politics, but the problem is at the high dollar level
of American politics. You have certainly shed some light on
that. But there is another way you can enter politics. Perhaps
it might be a little bit more rewarding to you.
Now, I wanted to ask the first question. Mr. Chung, has the
Department of Justice discouraged you in any way from
testifying today?
Mr. Chung. No.
Mr. Hutchinson. Have they put any restrictions on your
testimony that would affect your ability to tell the truth
completely?
Mr. Chung. The only very minor limitation of a few people,
the name cannot come out, or an ongoing investigation.
Mr. Hutchinson. Certain names you have to be careful not to
say that might be classified?
Mr. Chung. That is correct.
Mr. Hutchinson. Other than that, you have all the
incentives to tell the truth today?
Mr. Chung. That is correct.
Mr. Hutchinson. Now----
Mr. Chung. I intend to do that.
Mr. Hutchinson [continuing]. During the timeframe that you
are engaged in high-level politics, contributing hundreds of
thousands of dollars, did anyone ever mention to you the
difference between hard money contributions and soft money
contributions?
Mr. Chung. No. The very last day after the campaign finance
scandal broke out, I learned it from the newspaper.
Mr. Hutchinson. So were you aware that there were
contribution limits as to how much you could give a Federal
candidate?
Mr. Chung. I did not really read those at all. As the
chairman of my company, I don't open the mail. I only know what
the meetings I go, where should I go.
Mr. Hutchinson. So if someone asked you for $50,000, you
assumed it was all right?
Mr. Chung. That is correct.
Mr. Hutchinson. Now, you painted a picture that you were
receiving this money from your foreign business contacts, and
some of them were interested in your assistance in getting a
visa; is that correct?
Mr. Chung. If they want to come over here to the United
States, they need a visa, yes.
Mr. Hutchinson. They were asking your assistance in getting
a visa?
Mr. Chung. That is correct.
Mr. Hutchinson. They would give you money with the
understanding that you would contribute to politics in America,
with the hope that that would be of some assistance in them
getting a visa?
Mr. Chung. Not only to help them to obtain the visa, but
also to provide them--let me make it an easy way, a tour guide.
Transportation, expense in the United States, translator
service, and set up business with them. More important to
attract me to do business with them here in the United States.
That all my goal.
Mr. Hutchinson. So the visa was a small part of that?
Mr. Chung. Part of it.
Mr. Hutchinson. So whatever you had to do to get that
influence, were you having to use any improper influence, to
pay any money to get that visa?
Mr. Chung. I did give my testimony here, talked to Mr.
Parish. I stay with that statement I said to you.
Mr. Hutchinson. That was part of the money you were getting
from your business contacts. Some of it was flowing to Mr.
Parish?
Mr. Chung. That is correct.
Mr. Hutchinson. Did you have to utilize any other political
contacts in order to assist your business clients in getting
visas, other than Mr. Parish?
Mr. Chung. I used to ask Mr. Richard Sullivan of DNC to try
to help me with this. He said he will, but he never did.
Mr. Hutchinson. That was with Mr. Sullivan?
Mr. Chung. Of the DNC, but he never did. I did mention to
him, but he never did anything for me.
Mr. Hutchinson. As you brought these people over, many
times they were interested in an issue, for example, developing
business or a trade issue, is that true?
Mr. Chung. That is correct.
Mr. Hutchinson. Whenever you would bring them to a high-
level contact in government, would you all discuss an issue?
Mr. Chung. The only issue I remember, everyone, they also
ask the President of the United States, come to visit China.
That is all I know.
Mr. Hutchinson. Now, give me a flavor as to some agencies.
Did you meet with any agencies?
Mr. Chung. What agency you talk about?
Mr. Hutchinson. Pardon?
Mr. Chung. What agency you talk about?
Mr. Hutchinson. You said the only issue you talked about
was inviting people to come back to China. You never had any
specific issues or help that you needed from the U.S.
Government?
Mr. Chung. No.
Mr. Burton. Would the gentleman yield? I think he indicated
that he took somebody to the Security and Exchange Commission.
Mr. Chung. Yes.
Mr. Burton. What was the other one? And the Energy
Department?
Mr. Chung. Yes.
Mr. Hutchinson. Thank you, Mr. Chairman.
The Securities and Exchange Commission, you took someone
there?
Mr. Chung. Yes.
Mr. Hutchinson. What was the issue to be discussed there?
Mr. Chung. There is an issue of Mr. Yao would like to have
the Chinese company to be listed on the New York Stock
Exchange, and then he would like to know the regulations, and
we had been talking about the regulation inside. We did that
with two government officers.
Mr. Hutchinson. Is this the meeting that Mr. Kerry or
someone, Senator Kerry's staff helped set up?
Mr. Chung. That is correct.
Mr. Hutchinson. Your testimony was in reference to this,
about the John Kerry contribution, that you had already
obligated yourself to contribute to Mr. Kerry back in July when
his people arranged a meeting at the SEC for Liu Chao Ying?
Mr. Chung. That is correct.
Mr. Hutchinson. Why did you believe you were obligated to
contribute?
Mr. Chung. In my Chinese cultural background, somebody did
something good for you and you had to do something back to
them. I think it is the American way too. That is why I told to
Senator John Kerry's staff, back at the DNC Convention center
in Chicago, I said I will try to hold a fundraiser party for
him.
Mr. Hutchinson. So it was nothing said by Senator Kerry or
his staff that gave you that feeling, it was just your own
sense that you ought to contribute?
Mr. Chung. Yes.
Mr. Hutchinson. Now, you indicated that you tried to talk
with the DNC chairman, Don Fowler, at one particular point, and
you testified that Mr. Fowler scolded you for not meeting your
fundraising obligations. Do you recall that?
Mr. Chung. I will. It was the October 1996, on the ``Back
to the Future'' event in Los Angeles at Hollywood, and we--I
gave my testimony here already. They took my driver and my
secretary to meet with the President. That was the event. We
was in the parking lot, and ``Mr. Chairman,'' I said, ``Well,
Mr. Chairman, can I take a picture with you?'' He said, ``I
don't want to take a picture with you. You didn't give what you
said to me. I don't want to be your friend. I don't want to
take a picture with you.''
Mr. Hutchinson. That was a picture. Did you ever talk to
Mr. Fowler about any issues?
Mr. Chung. I tried to rescue Harry Wu. That was one of the
issues.
Mr. Hutchinson. You talked to him about that?
Mr. Chung. He also wrote a letter to me raising about that
issue.
Mr. Hutchinson. Did you feel like any of your contributions
related in any way to any assistance he might give in reference
to Mr. Wu?
Mr. Chung. I don't understand.
[Discussion off the record.]
Mr. Chung. I don't think so.
Mr. Hutchinson. Do you recall during this 2 or 3 year
period ever having any discussions about issues, and when I say
issue, do you know what I am talking about? Whether it is a
meeting with the Securities and Exchange Commission or a
meeting with the Energy Department, was there ever any matter
that was raised by you or your business clients in which the
response was closely tied to any contribution that you would
make?
Mr. Chung. Not with the people, no----
Mr. Sun. Excuse me 1 second.
[Discussion off the record.]
Mr. Chung. At one incident on March 9, 1995, regarding a
Presidential radio address, I did mention to Mr. Don Fowler and
Mr. Richard Sullivan about I want to bring these important
people to go to the radio address, and I show them my wish
list. And I did mention to them I would like to donate $50,000
if I can get all of this issue, which is my wish list, to be
granted. I did mention to them at the DNC. Except this one.
Mr. Hutchinson. Mr. Chairman, I have not finished, but my
time is up.
Mr. Burton. We will give everybody some more time after we
finish this round.
Mr. Waxman, you have 10 minutes.
Mr. Waxman. I yield to Ms. Schakowsky.
Ms. Schakowsky. Thank you very much. If I could just begin
by saying that I have more Asian-Americans in my Illinois
district than any other district in the State, and they have
acutely felt that the path to their rightful political
empowerment has been impeded as fallout from this situation.
They feel unfairly targeted as perpetrators somehow of campaign
finance abuses.
I deeply regret this and believe that Chinese-Americans and
Asian-Americans should be encouraged to participate fully, even
in a system that is as deeply flawed as ours and that cries out
for reform, but not because it is uniquely abused by Chinese-
Americans or the Chinese Government, but because it fosters the
analogy that you raised that somehow access to power is like
paying for a ride in the subway.
Let me just tell you what I see. I see a prominent U.S.
businessman that has established himself, is very well
connected, so connected that he even is often with the
President of the United States, that you have been able to
barter that for more business, to help other businesses like a
beer company, that you have established yourself as a go-to
guy, someone who can get things done.
So it would seem logical to me that Ms. Liu, General Ji, or
anyone else might see that giving money to you, not giving
money through you to someone but giving money to you, would be
advantageous for them, and that that is essentially the nature
of a contribution to you. Do you see it that way?
Mr. Chung. Yes. Yes, ma'am.
Ms. Schakowsky. So it would seem to me, then, at the time
you got that money, this is money that is being given to you,
that you felt, and this has been asked many times, but when you
gave $20,000 and not $300,000 to the DNC, were you worried
about that? Were you worried that you had broken some sort of
commitment? Were you in fear for your life? Or did you feel
that this was money that you could spend and that you were
spending it as you thought?
Mr. Chung. This is my money. I spend it the way I want to
spend it.
Ms. Schakowsky. So at that point there was no fear of
retribution, that somehow you had violated an order or even an
understanding?
Mr. Chung. No.
Ms. Schakowsky. I wanted to ask you about these fears for
your life. In your written testimony you said you thought your
family was threatened by Robert Luu. But in your answers to
questions about your bank fraud that Representative Mink had
asked, you said that you thought that your life and your
family's life was threatened by Peter Khen. I wanted to just
clarify that this was a completely separate death threat; is
that correct?
Mr. Chung. That is correct. That depends on what the FBI
has been told.
Ms. Schakowsky. How many times has your life or your
family's life been threatened, in your view?
Mr. Chung. Incidents, these two.
Ms. Schakowsky. Well, I thank you. I have no further
questions. I would yield back my time.
Mr. Waxman. I will take the time.
Ms. Schakowsky. I am sorry. I would yield back my time to
Mr. Waxman.
Mr. Chung. Mr. Waxman, can I just say a little bit more
statement? I feel so sorry for my family. My wife, I love
deeply. My 17 year old daughter, who is a top student in the
high school, the top 10 graduate, she almost request not attend
the graduation. The last 2 weeks of high school she have to go
back to school with an FBI escort. I feel so sorry for my 2-
year-old daughter and 5-year-old son. They have to, under the
government protection for 24 hours a day, and they cannot do
whatever they want to do.
I love my family so much. I want to say I am so sorry, I am
so sorry to my family. They should not deserve this. But they
are all behind me to come out and tell the truth, because my
daughter told me that--she is a college student now--she said,
``Dad, no matter whether you like it or not, this is part of
American history. What do you want to do with it?'' I said to
her I want to set the record straight.
Mr. Waxman. Mr. Chung, I appreciate what you have to say.
It is clearly coming from your heart. You had a threat to your
life by somebody that had to do with a mortgage. That has
nothing to do with the Chinese Government? Or is this something
else?
Mr. Chung. That----
Mr. Waxman. Is that organized crime you are fearful of, or
has that something to do----
Mr. Chung. Peter Khen, what he said to me, he is organized
crime and he was asked to come ask me for that $200,000. If I
don't give it to him, he will kill my family.
Mr. Waxman. That is the mortgage money.
Mr. Chung. That is the mortgage. I tried to get it out.
Mr. Waxman. Is it related in any way to General Ji or
anybody else in China that you have been dealing with on the
political contributions issue?
Mr. Chung. Well, as I told you, I got the money from, the
money I put into my account, a portion of them I pay for
mortgage. And then the house is already paid off, and then this
gentleman come out to ask for the money. So I take a mortgage
and pay for it.
Mr. Waxman. Mr. Sun----
Mr. Sun. I think I can help a little bit, Congressman. The
reason why it is a complicated answer is because I believe
there is some information suggesting that Mr. Khen knows some
of the other people that Mr. Chung dealt with in China. So you
could draw all kinds of circles and links to each other. I
don't know if he should speculate beyond that, but there is
some information suggesting that Mr. Khen knows some of the
people that Mr. Chung dealt with in China.
Mr. Waxman. Basically it sounds like you owed some money
and they were after you to get some money back, and were
threatening him. Is that the situation?
Mr. Chung. Basically they want to get their investment
back.
Mr. Sun. It was in connection with the $200,000 investment
by the Great Wall Cultural Association and some of those
individuals, one of whom introduced Mr. Chung to Robert Luu.
Mr. Waxman. You have been here for hours and you have been
asked these questions over and over again, and you have given
your testimony, I think in a forthright way. You might be
surprised to know that on one of the media outlets there is a
report that says Johnny Chung testified today that he was
directed by the Chinese Government and gave that $300,000 at
their direction to the Democratic party.
Is that an accurate statement for a reporter to make of
what your testimony is all about?
Mr. Chung. I tell the whole truth to the government. No.
Mr. Waxman. You've been telling the truth here today, is
that right?
Mr. Chung. Yes, I am.
Mr. Waxman. The truth of the matter was that you received
money from a woman who was going into business with you, and
you considered it your money. You didn't give contributions to
the Democratic party from money from the Chinese Government. As
far as you know, the money was from her to you as part of an
investment, and then you used part of that money for
contributions and most of it for your own personal business?
Mr. Chung. I give the money clearly thinking that is my own
money. I donate it.
Mr. Waxman. Well, you have answered it at so many different
times. It just amazes me how the press can keep on repeating
wrong information.
Mr. Chairman, I am going to yield back the balance of our
time on this 10 minute round.
Mr. Burton. Thank you, Mr. Waxman. Mr. Horn.
Mr. Horn. Thank you, Mr. Chairman.
Just a few questions, sir to clarify the testimony. Did
anybody within the Department of Justice or the administration
tell you what you could or could not tell in committee? Did you
have any people that sought to instruct you?
Mr. Chung. I am sorry, I can't hear. I have a hearing
problem.
Mr. Horn. Did any people in Justice or the administration
tell you what you could say or could not say to this committee?
Did anyone give you any advice?
Mr. Chung. No.
Mr. Horn. OK. So this is all from you, with perhaps your
lawyers cautioning you one way or another, I take it. In August
1996, you note that you had a lot of money commingled in your
accounts and you regarded this basically as your money. Do you
know of any money that came to you a year before the November
1996 election, that might have had its origin in China and
simply in the Chinese Government, and simply put it in your
accounts because you are the one connected with the Democratic
National Committee and other political parties?
[Discussion off the record.]
Mr. Sun. I think he is having trouble understanding the
question, Congressman. Is the question----
Mr. Horn. The question is, you had a number, you had really
several million dollars, didn't you, in those accounts made up
of different investments, in quotes, and the question is this:
If you had that money, did any of it come in your mind from the
Chinese Government or agents of the Chinese Government?
Mr. Chung. No.
Mr. Horn. OK. So all of that other money was simply to give
it to you to invest, even though all of the people probably
knew that you were very active in fundraising for the
Democratic party and the Presidential campaign?
Mr. Chung. Basically I know they are all businessmen who I
deal with, except I already give my testimony, at the abalone
restaurant in Hong Kong I deal with General Ji, what I know
that information. Besides that one, I know all of them. They
are businessmen.
Mr. Horn. You cite a judge on page 12. Is that Judge Real,
Federal District Judge?
Mr. Chung. That is correct.
Mr. Horn. Having known Judge Real, I must say if we had him
in Washington, DC, this investigation would have been over 2
years ago and a lot of people would be confessing, not enjoying
the sunshine hither and yon with the 121 that are somewhere
else, that we can't get our hands on. He is one tough judge,
like Judge Sirica was in the Nixon Watergate thing. But,
unfortunately, he is 3,000 miles away, so we don't have the
benefit of his services here in the judicial group in the
District of Columbia.
Now, I am curious on the Boeing representative that you
mention. Was he Chinese or was he an American, to your
knowledge, the Boeing representative that you had in Hong Kong,
that you talked to in Hong Kong?
Mr. Chung. Liu Chao Ying tried to ask me to get in touch
with the Boeing Co. for the reason of buying commercial parts,
Boeing commercial parts. I give my order to my former general
manager, Irene Wu, I said write some letters to Boeing Co. and
see what we can find, who we can talk. But she didn't make it,
the trip. That was there, nothing else.
Mr. Horn. Now, you note here you had limited dealings with
Mark Middleton. Could you sum up that----
Mr. Chung. And to answer your question, Mr. Yao----
[Discussion off the record.]
Mr. Chung. I do not know Mr. Yung is a Chinese-American or
what.
Mr. Horn. You noted you had limited dealings with Mark
Middleton. Could you sum up for the committee exactly what
those dealings were and what you know about Mark Middleton?
Mr. Chung. I know him 1994 on Christmas party when I
brought Haomen Beer people there. I stand out because I am the
only one with host Haomen Beer people without tuxedo. He was
one without tuxedo. Later on I went to try to get a fax
broadcasting service to be used for the White House, and I have
a chance to talk to his staff at his office.
As my statement here today says, I was also talking about
later, about Ruth Lin, about Swiss bank. I talked to Mark
Middleton about this.
Back there when Liu Chao Ying tried to talk to me, I raised
my little bit concern about it, and she give me the example,
and she said Mark Middleton through the Singapore group, Mr. W-
I-N, we give Mark Middleton half a million dollars. That is all
I know.
Mr. Horn. Was that overseas Chinese or was that the Chinese
Government coming in through Singapore?
Mr. Chung. I do not know that.
Mr. Horn. Did Mr. Fowler, or anyone with whom you had a
close relationship and were giving thousands of dollars, did
any of them have any knowledge in any conversation they had
with you that it came from the Chinese Government?
Mr. Chung. No.
Mr. Horn. So you didn't see anybody in those you
contributed to that had the slightest idea that any of that
money would come from the Chinese Government?
Mr. Chung. No.
Mr. Horn. OK, just one more----
Mr. Chung. Mr. Congressman, I want to make it truly for the
official records. I did talk to you last time. I know you come
from Long Beach, which you are my neighbor. I told you that the
only official in Long Beach is you I know. I do not know the
mayor, I do not know the Long Beach harbor commissioner. The
only reason I went to Long Beach, I take my children for
fishing.
Mr. Horn. Well, you picked the right town. You could take
them to the aquarium now.
Mr. Chung. I want to clear the record, I have nothing to do
with Cosco. Difficult talk to you last time.
Mr. Horn. Thank you Mr. Chairman.
Thank you for coming here and having 4 hours of this
interrogation. We appreciate it.
Mr. Chung. Thank you for your encouragement.
Mr. Burton. Mrs. Biggert.
Mrs. Biggert. Thank you, Mr. Chairman. I know, Mr. Chung,
that this has been a long hearing, so I won't ask too many
questions. You talked about how you started your business, how
you needed to expand capital, and from there you went to
targeting government agencies to increase your business.
How then did you get so involved in the political process
as far as supporting candidates? Because most people, I know
you stated that you had been with your family, and you went to
meet the President and the First Lady at his birthday party.
There are not too many Americans who really do have the
opportunity to do that. But from the startup of a company, then
to being so involved with so many events like that, how did
that translate from doing business to hobnobbing with a lot of
the politicians?
Mr. Chung. I was doing my fax broadcasting business, tried
to market my fax broadcasting service, State after State. And
then I came to Washington, DC, for the National Governors
Association meeting. That would be the easiest way you can meet
all the Governors' staffs at the same time.
You know, we are a great country. It is a big country. If
you want to travel State after State, it will take a lot of
time. And that is the only time I can meet all of them
together.
At that time I got a lady named Ms. Rita Lewis. She is a
special assistant to the President, political affairs, at the
White House. She invited me to go to the White House, and what
my motivator is, is I am going to do business with my fax
broadcasting.
Later on, because as you know, I am also a Taiwanese-
American, and the Taiwanese-American Association here in the
United States, we are talking about all American citizens here,
they raise about the issue of American passports. We are
talking about American passport, and that the birthplace, they
also write down China. They would like to change it to Taiwan,
which they really were born in Taiwan.
I tried to help them up and tried to set up the meeting.
Finally the meeting was set up by Ms. Rita Lewis and also we
was invited to go to 48 U.S.--the birthday for President
Clinton. Let me repeat, we are all American citizens, we all
agreed to go to that one. Then I begin to realize if you
donate, you got access.
Mrs. Biggert. Well, was there ever anybody that told you,
or did you ask anyone about our Federal election laws when you
make a donation? Did you ask anybody how you do that, how much
money you can donate, or did anybody suggest to you----
Mr. Chung. I never asked. Nobody told me.
Mrs. Biggert. So there was no conversation about, well, how
much I am expected to give?
Mr. Chung. I don't know the law. I never asked, and they
never told me.
Mrs. Biggert. OK. Regardless of whether it was a Governor
or whether it was Federal?
Mr. Chung. I learn all of this after the campaign finance
scandal broke out. Believe me, I got 2\1/2\ years, a lot of
time alone. I read a lot and I begin to realize. Before that I
don't understand. Big, big thank you. Thank you, Mr. Chairman.
Mr. Burton. Mr. Souder.
Mr. Souder. First off let me state for the record that it's
been stated several times that the Justice Department didn't
find any case of laundering money in this situation. I'm just--
I'm shocked. I'm just astounded that our Justice Department
didn't find any laundering of money; that's sarcastic.
Let me ask a couple of questions. Did you view the
contributions you personally made to the Democratic party as
business investments, as part of your doing business?
Mr. Chung. Yes.
Mr. Souder. And when you got the $300,000, would you not
have viewed some of that as a business investment to impress
people by giving it to different political parties?
Mr. Chung. As I said in my statement today, I always said
that, those people who give me the money as an investment or
consulting fee, they all know that part of it, it's going to
give it to the political donation for the access. And, again, I
always say that that's my money and I give it to. If I didn't
give the money, I don't think get access.
Mr. Souder. In fact, it's impossible to separate the money
because you've said that part of the reason you were drawn to
their attention was the pictures. You've talked about the radio
address. You've talked about the birthday party. And if that's
kind of your business investments, aren't the politics of this
inseparable from your business investments? Aren't they the
same thing roughly; not all of your money, but a big portion of
it was getting pictures, radio addresses and different things,
so those are business investments; what you're calling business
investments, other people may call political contributions?
Mr. Chung. Business investment.
Mr. Souder. Because you've got very upset----
Mr. Chung. I'm a businessman, I call it business
investment.
Mr. Souder. In fact, in your testimony you said you got
very upset. It was a funny story about your secretary and your
driver. When, in fact, the general's wife and son didn't get
their picture, presumably, wouldn't that have been because some
of the general's money had helped buy the tickets?
Mr. Chung. If they did take pictures, the general's wife
and the general's son, I will give $25,000 to the DNC.
Mr. Souder. And the general----
Mr. Chung. And that money, whatever I had in my account, I
will give it to.
Mr. Souder. Wouldn't the general have been pretty upset if
his wife had called him and his son and said, I gave $300,000
to Mr. Chung?
Mr. Chung. I don't know that. But--well, did you remember I
said it's--I charter all the way to the--I mean I am in a group
of people there, and I introduced them with the President, and
they did indeed take the pictures.
Mr. Souder. He probably would have been pretty upset if his
son and wife were there, and he would have not thought much he
was a businessman, if anything else?
Mr. Chung. He never told me. I never asked him.
Mr. Souder. You said you were uncomfortable when you
first--even before you knew who he was, you were told in the
car or after that first dinner that you were uncomfortable
about the relationship, when it was changing from what Liu had
told you. Why were you uncomfortable? Did you view this as
changing from a business investment to a political operation?
Were you afraid that there were some other implications here,
because you saw his power relationship; you didn't know at that
point that he was director of intelligence?
Mr. Chung. I think any American businessman who gets a
chance to encounter with the equal to CIA Director, everybody
feel uncomfortable with them. I do feel----
Mr. Souder. You didn't know that, I thought.
Mr. Chung. I'm sorry.
Mr. Souder. When you first were at the dinner, you didn't
know----
Mr. Chung. He didn't tell me, he said he was Mr. Xu. He
used a different name.
Mr. Souder. When you found out in the car that he was, in
effect, the director of the CIA, why didn't you break it off
then?
Mr. Chung. I did bring the issue to the general's daughter.
But remember, Congressman, I have two teenagers back there in
China with me on this vacation, and now I know this gentleman
who is the military director. I want to make sure my two
teenagers are brought over there back.
Mr. Souder. So when he said----
Mr. Chung. I do raise the issue--I want to tell you that I
do raise the issue uncomfortable. But I have to keep quiet and
go back over there and bring them back over.
Mr. Burton. So when he said, I would like you to hire my
son, or they said he would like you to hire him, you didn't
feel like you had much choice?
Mr. Chung. That was a second meeting back there at the
hotel by the bar. When Mrs. Ji come down to join us, the whole
entire conversation turned out to be a mama's and papa's--that
is exactly my statement, mama's and papa's talk. And she didn't
say it, but I have to take it this one as the--excuse me, the
way a Chinese, very polite to say it, but my son is going to be
still in over there at UCLA. My son is going to live outside
the campus. What do you think about it? I said, let go. I also
got a teenager. You've got to let go. Someday you have to face
an empty nest, and why he talked to me a lot about this,
obviously, he want me to take care of the son. That's the only
interpretation I can take.
Mr. Souder. Did his son do a lot of work for you?
Mr. Chung. Some. Some, not a lot.
Mr. Souder. Do you know what his son was doing? Did he seem
to be just a student? Did General Ji suggest any other
employees to you?
Mr. Chung. No, only the son. He didn't even suggest son,
but Ms. Liu Chao Ying suggested taking care of the son.
Mr. Souder. While his son was on the payroll, do you know
if he made any calls back and forth?
Mr. Chung. I'm sorry, I didn't get it.
Mr. Souder. Do you know if his son made any calls back and
forth to his father while he was on your payroll? Did he ever
use your business phone for that, or----
Mr. Chung. I do not know, because I have so many employees
in my office, I don't trace their phone call. But I do--in one
encounter he said he was going back for Christmas party,
Christmastime, going back to China to be with the father.
That's all I know.
Mr. Souder. Could they have been using your office as a
conduit at any point since you said you weren't tracing it, and
they clearly had $300,000 invested in your office?
Mr. Chung. I'm sorry, I don't get the last question.
Mr. Souder. In other words, you had the CIA Director's son
on your payroll working out of your office, and what you just
said is that you didn't know what he was necessarily doing
there, and I'm wondering whether he could have been any sort of
a conduit in your office since you didn't know what he was
doing, and yet he was a son of the CIA Director. Many Americans
may get investments----
Mr. Chung. I don't know, but I also want to point out Alex,
as I know, what he said to me, he came to the United States
when he was 11 year old, so he had been here for more than--
he's more like an American boy, speak much more better English
like my daughters, OK? He's been here for 11 years. And then
he's working in my office, what I tried to ask him to, doing a
lot of research on one of the projects we are going to with the
fax broadcasting, and then he was working with one of my
secretaries, OK?
A lot of times is spent at the laboratory--I mean, at the
laboratory to try to find those fax broadcasting information.
That's all I tried to give him instruction to do. That's all I
know.
Mr. Souder. Thank you.
Mr. Burton. Thank you, Mr. Souder.
I guess now we will wrap up----
Mr. Chung. Mr. Chairman, can I have----
Mr. Burton [continuing]. With Mr. Waxman first. Then I will
surmise. Then if you have some comments, we will let you
comment.
Did you have something you want to say right this minute?
Mr. Chung. Can I have 5-minute break for restroom.
Mr. Burton. Sure. We will recess for 5 minutes, and then we
will wrap up.
[Recess.]
Mr. Burton. The committee will be recalled to order, and we
will now yield to Mr. Waxman for wrap-up.
Mr. Waxman. I thank you, Mr. Chairman.
Mr. Chung, I'm just trying to get one little piece that is
still not clear in my mind. The time that General Ji told you
that he wanted $300,000 to go to the President because he
wanted him to be reelected, or at least that's the impression
we get that he wanted that money to go to the President's
reelection, you didn't know who he was; you didn't know he was
the head of intelligence at that point, is that right?
Mr. Chung. I don't.
Mr. Waxman. So what did you think, that here's some fellow
trying to renegotiate the deal that you had already worked out
with Liu?
Mr. Chung. I told this committee, I said, who the hell this
guy is, Xu.
Mr. Waxman. He was trying to tell you what to do with the
money that you were expecting already for business purposes?
Mr. Chung. That's correct.
Mr. Waxman. And then later you found out he was the head of
intelligence, and that made you uncomfortable because you
thought he was trying to----
Mr. Chung. I rest the--I answered that question over and
over. It is, as with American businessman, anyone with the CIA
type, it was uncomfortable, yes.
Mr. Waxman. So you went to Liu and you said, I don't feel
comfortable with this, and then she told you, well, go ahead
and use the money for contributions, for taking care of the
business, for everything that you had originally agreed to with
her?
Mr. Chung. Yes, sir.
Mr. Waxman. General Ji at one time said that he was going
to wire the money to her, but you don't know, in fact, whether
he did wire the money to her?
Mr. Chung. I don't. But I heard what he said. I don't.
Mr. Waxman. You just heard what he said?
Mr. Chung. Yeah.
Mr. Waxman. As far as you know, you got the money from her?
Mr. Chung. From her.
Mr. Waxman. Well, I have to tell you, we've been here all
this time for almost 5 hours, and we started the hearing with
statements about this huge Chinese plot tying everything in
together, people in Los Alamos, and national security being
jeopardized. It may well be jeopardized, we don't know, but it
seems to me that to tie that into the story you have to say to
us is a big reach.
What I've heard from you and what I know about you is that
you found a system where if you put in money, you got access,
and if you got access, it helped you get business, and you used
that system, and it's a shame that we have a system like that,
but that was the system.
Mr. Chung. Can I call American way, that's American way.
Mr. Waxman. It was the American way. And you impressed a
lot of people, including Liu and General Ji and others, with
the fact that you were a person who had influence and could get
things done?
Mr. Chung. That's correct.
Mr. Waxman. And they wanted to have influence with you,
they wanted to do business with you; isn't that right?
Mr. Chung. Maybe they thought I'm important.
Mr. Waxman. I think they did. And one theory could be they
were just using you to give money to President Clinton, but
that seems hard to accept when it turned out you only gave
maybe $35,000, maybe $20,000, but, you know, less than 10
percent, or around 10 percent of the total amount of money to
the Democrats. It doesn't----
Mr. Chung. Mr. Congressman, I always told you that the
money always commingled together.
Mr. Waxman. That's right. But if they were trying to get
$300,000 to the President, if that's what General Ji was trying
to do, he didn't succeed, did he?
Mr. Chung. He didn't. It's my money, I'm to let it, to
commingle all of the money together, is my business money.
Mr. Waxman. Well, I think that what you're saying is an
accurate statement. I think if others want to make a deal out
of this that the Chinese were directing a scheme and a
conspiracy, it seems to me that's a pretty far reach from your
testimony and what we've heard today. They may be right, but
that's a conclusion that is fully speculative without enough
factual basis.
All we know is that you received money from foreign
business people, including Liu and Ji; you had many connections
with this general who suggested to you he would like you to
help, but really said you can give money to your President.
When somebody says you can do this, it doesn't make you have to
do, it means you can do it.
Mr. Chung. You can do it. You can do it.
Mr. Waxman. Well, I'm amazed at the press, because the
press, I think, has continued to report this hearing as a
hearing where it was clear that the Chinese Government gave
money to you, and you, in turn, gave that $300,000 in money
that you received to the President, and this showed that the
Chinese Government was trying to reelect the President, for
whatever reasons. And it just seems to be a conclusion that is
it's hard to come to----
Mr. Chung. Mr. Waxman----
Mr. Waxman [continuing]. From this testimony.
Mr. Chung [continuing]. The press also destroyed my
reputation, my business, also destroyed everything I own. I'm
broke. I'm worse than broke.
Mr. Waxman. It was a pretty sad commentary, because as a
result of all of this, you've been hurt, Maggie Williams has
been hurt, Secretary O'Leary's reputation was hurt. All of
these people had to incur legal fees in the hundreds of
thousands of dollars over, as I'm sure you have, and when all
is said and done, nothing that is substantial in establishing
any kind of criminal actions is proved. I just think it has
been a huge waste of taxpayers' money, and a lot of harm has
been done to a lot of individuals including you.
Mr. Chung. I want to use this as a good time to make my own
statement here is I'm broke. No matter who want to try to
harass me, I am broke. Don't come to me. Go to someone richer.
Mr. Waxman. You've said it. I yield back the balance of my
time because you can't say anything more than that.
Mr. Burton. Do you want me to yield to you, Mr. Barr?
Mr. Barr. Thank you, Mr. Chairman.
Mr. Chairman, apparently there's more of a gulf between the
Seventh District of Georgia and Mr. Waxman's district in
California than just geography. In the Seventh District of
Georgia, when you go to meet somebody at a restaurant, if it's
an up-and-up transaction, you don't go down to the basement,
you don't have somebody sneak in through a kitchen door, you
don't have them give you a pseudonym, you don't have a
discussion that talks about funneling foreign money into this
country, you don't have a discussion about $300,000 possibly
being used to influence the U.S. election and then have these
people leave the same way they came in.
And in the Seventh District, you don't then get into a car
and be advised by your companion who set up the meeting not to
discuss the transaction or the discussion in the presence of a
third party. And then you don't then have a continuing
discussion about this person. You then don't find out and do
nothing about it that this person, by all appearances, is the
head of a foreign military intelligence service, and so on and
so forth.
Now, this may be the way that the gentleman from California
meets people in restaurants and has dinners and has
discussions, but it isn't in Georgia. And these sorts of things
raise very reasonable questions in the mind of many Americans.
Thankfully the gentleman from California is not a U.S.
attorney. If he were, then very, very few cases would ever be
prosecuted for the benefit of the people of the United States,
because frequently U.S. attorneys are called upon to look at
accounts in which funds have been commingled, look at the
intent of the parties to the transactions, look at their words,
draw reasonable inferences therefrom. And the reasonable
inference that I think Mr. Chung and myself and others have
drawn from this, but the subtleties of which escape the
gentleman from California, clearly indicate that there was, at
least with regard to this--one can characterize it as the
gentleman from--the other gentleman from California Mr. Lantos
did, is one very small part of a much larger scheme, or one can
say that this was very important in and of its own right.
But I think a reasonable inference clearly for purposes of
pursuing this matter further, if one is indeed concerned
about--which some may not be--about the integrity of our
electoral system, and business as usual may be in California to
take money from foreign sources, it is not business as usual in
the Seventh District of Georgia. And when we see in the Seventh
District of Georgia or when we see as former U.S. attorneys
that people meet under these circumstances, talk about
funneling $300,000 and possibly using it for the reelection of
the President very likely coming from a foreign source, then
further efforts made to obstruct justice, to intimidate
witnesses, these things set off red lights. One hopes that,
unlike the gentleman from California, these red lights have
registered at our Department of Justice and that these matters
will be followed up on.
Mr. Chairman, I appreciate that you understand the
subtleties of these matters much better than others do, that
you are concerned about the integrity of our electoral system,
that you see this as very strong evidence of foreign money
coming in, that you focus on the intent of people like General
Ji, and that you draw reasonable inferences from the
circumstances and the language that was used, as well as the
evidence of foreign money coming in from different accounts,
than others do.
I think this has been a very important hearing. I
appreciate Mr. Chung being here, and I also appreciate his
frankness and indicating to us, very truthfully, when certain
things were apparent to him. And he's drawn a very clear line
between his intentions and what he viewed as something--as
opposed to reasonable inferences about the intentions of
others, such as General Ji. And I think this has been a very
important hearing for the American people, and I appreciate the
chairman holding it. I hope that the Department of Justice pays
a little bit more attention than some on the other side seem to
be willing to indicate.
Mr. Waxman. Will the gentleman yield? Will the gentleman
yield to me?
Mr. Burton. Evidently the gentleman doesn't yield.
Mr. Waxman. Will the chairman allow me to make a statement
since the gentleman referred to me?
Mr. Burton. I was going to make my final statement. Go
ahead, we will let you.
Mr. Waxman. I thank you.
Certainly what we've had described is pretty suspicious
circumstances, when, as Mr. Chung related, someone would enter
through the kitchen and talk about how he should use the money
and all of that. But when you look at the facts, I don't think
that anybody is able to establish that any of those nefarious
plots ever actually took place. And we don't know what people
intended, but I certainly wouldn't give General Ji the benefit
of the doubt, because all we know is what Mr. Chung has told
us, and what he has told us is pretty damning.
But what he's also told us is that the reality was that he
doesn't know that he got the money from any foreign government.
He can't establish that. He got the money as part of a business
transaction. He gave a small part of it in donations as he saw
fit, and there's nothing illegal about that. Thank you.
Mr. Burton. Let me just end up by saying that I share the
gentleman from Georgia's conclusions. But I would like to just
add a little bit to that, and I understand the position that
Mr. Chung is in. I mean, I think that anybody who has followed
these hearings today understands the whole situation and how
there has to be some concern about how he addresses some of
these questions.
General Ji did come in through the kitchen; General Ji did
use an alternative name; General Ji did suggest that $300,000
be given to the President. The inference was definitely there.
But even more than that, Mr. Liu used the name that Mr. Chung
gave to Liu Chao Ying, the country girl. How did he know that?
He only knew it because somebody in the Chinese Government let
him know that name. And so Mr. Liu conveyed that name, the
country girl, to Mr. Chung to let him know that he better keep
his mouth shut.
That is pretty important. I'm not a lawyer, but it's pretty
important, because it says very clearly, that, yeah, the head
of the military intelligence met with you, and, yeah, they
wired $300,000 through Liu Chao Ying to you, and the country
girl, a term he gave to that woman, said, you know, you better
keep your mouth shut, and the FBI thought it was severe enough
that they put him, on a number of occasions, into a secure
environment.
And so I think that anybody who has followed this hearing
has to come to the conclusion that the intent, not of Mr. Chung
necessarily, but the intent of the Chinese Government, was
through Liu Chao Ying from the head of the Chinese military
intelligence to some way influence American policy.
Now, we don't know where the end is, but we do know that
espionage is taking place at Livermore, at Los Alamos, and that
we've had some severe problems; that the man who was involved
in the espionage has been kept on over there for 3 years; that
four times there was wire taps denied, and all of these
questions need to be answered for the American people.
And, Mr. Chung, although it has been said here today by Mr.
Lantos that you are a very small person in this overall mosaic,
the fact of the matter is I think you are pretty significant in
figuring out what the Chinese were trying to do. We haven't
come to any conclusions yet. That's why I'm a little
disappointed that Justice hasn't taken more of an interest in
this. Hopefully they will after this hearing.
We're going to continue to look into these things. And I
want to thank you, and I want to thank Mr. Sun, and I want to
thank Mr. Murphy and the young lady back there, Ms. Cohen. And,
Mr. Yan, we absolutely didn't need you as much as we thought we
would today, but we do appreciate your patience in being with
us. And with that, thank you once again.
I want to ask unanimous consent that Members be allowed to
submit written questions to Mr. Chung, hopefully you will
answer those for us, and that both questions and Mr. Chung's
answers will be included in the record. And without objection,
so ordered.
And with that, we stand adjourned. Thank you.
[Whereupon, at 5 p.m., the committee was adjourned.]
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