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Star Political Campaign Economics - Page A1 Star
March 7, 1997

FBI Knew Of 1996 Illegal Political Contributions Of Foreign Nationals

By Howard Hobbs, JD, PhD Economics & Legal Editor

WASHINGTON DESK - President Clinton said this week that his administration had worked within the current laws and had not 'compromised' itself. When reporters asked the president why he does not ask Attorney General Janet Reno to appoint a special counsel to investigate foreign political contributions to the Clinton-Gore Campaign, as he did for Whitewater, Clinton said there is no current law on the books.

U.S. Officials have reported to Congress this week that last year the FBI warned California Senator Dianne Feinstein(D), that she had been targeted by China to receive illegal campaign contributions funneled through foreign corporations.

The unusual warnings, delivered in an individual classified briefing, was based on what the officials called 'specific and credible' intelligence information.

Feinstein, a member of the Foreign Relations Committee said she received the FBI briefing on June 14, 1996. The Washington Post reported on Sunday that Bill Chandler, Feinstein's spokesman, declined to provide further information, but said Feinstein decided on Friday to return about $12,000 in campaign contributions from donors associated with the Lippo Group, an Indonesian banking and real estate conglomerate with extensive business interests in China.

Investigators have obtained what the officials termed 'conclusive evidence' that Chinese government funds were funneled into the United States last year, although it remains uncertain whether any of the money ended up in congressional or presidential campaign coffers. Such contributions would violate federal law, which prohibits foreign individuals, corporations and governments from donating to U.S. political campaigns.

President Clinton would have had no difficulty locating the law in the White House Library or the Library of Congress, or in any public library in the United States. Simply stated, the law makes it a violation of federal law to solicit or receive political contributions from foreign nationals.

This law is well known and was first enacted over thirty years ago. It is part of the amendments to the Foreign Agents Registration Act (FARA), an "internal security" statute.

A Justice Department task force is examining a range of violations that may have occurred as the administration solicited millions of dollars in donations for the 1996 presidential election.

Among the laws the president should have been fully aware of is the Foreign Agents Registration Act which requires those who engage in political activities or solicit money on behalf of a foreign country, corporation or businessman to register with the Justice Department.

Legal authorities say half a dozen or more intermediaries who arranged meetings with president Clinton inside the White House and elsewhere, or other U.S. officials for foreign-linked donors appear to have engaged in the activities covered by the law. Yet none has ever registered as a foreign agent and there has been no indication that the White House ever checked on them with the Justice Department.

  Violation of this law may be another reason that an independent counsel should be appointed to take over the Justice Department's campaign finance probe, some authorities said.

Huang, the central figure in both Justice Department and congressional investigations of the foreign-money controversy, interceded for officials of the Chinese agent, Lippo Group in setting up meetings at the White House and the Export-Import Bank, according to documents and statements by others.

Huang, who is under subpoena by congressional investigators, and is suspected of seeking influence with pressident Clinton and the first lady as an agent of Communist China.

The law includes registration requirements for the agents of foreign businessmen and the prohibition against soliciting and accepting political contributions from foreign nationals.

In 1974, the law was incorporated into the Federal Election Campaign Act (the Act), which gave the Federal Election Commission (FEC) jurisdiction over its enforcement and interpretation. There are no exceptions for the president, the first lady's staff, or the vice president.

Under the Act, foreign nationals are prohibited from making contributions or expenditures (including independent expenditures) in connection with U.S. elections (federal, state or local), either directly or through another person.

Also, the soliciting and acceptance of political contributions from foreign nationals by the president or the vice president, or the White House staff or any political committee, is prohibited in all U.S. elections federal, state and local.[U.S.C. §441e; 11 CFR 110.4(a) and 110.9(a).] Soliciting and acceptance of political contributions from foreign nations is a very serious crime at the same criminal level as espionage against the United States.

The following groups and individuals are considered "foreign nationals" and are therefore subject to the prohibition:

· Foreign governments;
· Foreign political parties;
· Foreign corporations;
· Foreign associations;
· Foreign partnerships;
· Individuals with foreign citizenship; and
· Immigrants not possessing a "green card".

When a federal political committee (a committee involved in federal election activity) receives a contribution it believes may be from a foreign national, it must:

· Return the contribution to the donor without depositing it; or
· Deposit the contribution and take steps to determine its legality, as described below.

Either action must be taken within 10 days of the treasurer's receipt. [11 CFR 103.3 (b)(1).]

If the committee decides to deposit the contribution, the treasurer must make sure that the funds are not spent because they may have to be refunded. Additionally, he or she must maintain a written record explaining why the contribution may be prohibited. [11 CFR 103.3(b)(4) and (5).] The legality of the contribution must be confirmed within 30 days of the treasurer's receipt, or the committee must issue a refund.[11 CFR 103.3(b)(1).]

If the committee deposits a contribution that appears to be legal, but later discovers that the deposited contribution is from a foreign national, it must refund the contribution within 30 days of making the discovery. If a committee lacks sufficient funds to make a refund when a prohibited contribution is discovered, it must use the next funds it receives. [11 CFR 103.3(b)(1)and(2).]

Foreign nationals may not participate in donation activity, allocate funds for donations, or make decisions regarding donations (e.g., selecting the recipients, approving the making of donations or approving the issuance of donation checks).

Individuals and committees have no excuse for engaging in any type of political activity involving foreign nationals.

Evidence of legality includes, for example, a written statement from the contributor explaining why the contribution is legal (e.g. donor has a green card), or an oral explanation that is recorded in a memorandum.


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