CNN | May 11, 1999

WASHINGTON (AllPolitics, May 11) -- For the first time, campaign fund-raising figure Johnny Chung publicly detailed his involvement in the campaign fund-raising scandal surrounding the 1996 election, including the allegation that the head of the Chinese military intelligence gave him $300,000 intended to help re-elect President Bill Clinton.

Chung began testifying Tuesday before the House Government Reform Committee about his fund-raising activities during the 1996 presidential campaign. The hearing comes at a complicated time as U.S.-China relations have been strained by both NATO's accidental bombing of China's embassy in Belgrade and the investigation into whether China stole U.S. nuclear weapons secrets.

For Republicans, Chung is the main example of what they contend was a Chinese effort to influence the 1996 presidential elections, including a donation of $300,000 by General Ji Shengde, the head of the Chinese military intelligence.

In his statement, Chung gave a detailed recounting of his meeting with Ji and his activity surrounding the donation. He said that acting under advice of the woman who arranged the payment from the general, he kept the money for other purposes, including to help take care of the general's son, Alex, who was attending college in Los Angeles.

Chung said none of the $300,000 that he said Li gave him was used as political donations.

Chung reiterated, both in English and Chinese, what Ji told him when he met the general in the basement of a restaurant. "We like your president very much. We hope to see him re-elected. I will give you 300,000 U.S dollars. You can give it to your president and the Democratic Party," Chung quoted Ji as saying.

Chung was asked by a committee lawyer what his response was to the general's statement. "I said to myself, 'Who the hell this guy is? Who do you think you are?' But I didn't say it," Chung said.

The FBI has traced only $20,000 of that money to the Democratic National Committee (DNC). As part of the fund-raising investigation, Chung has pleaded guilty to making $20,000 in illegal contributions to Democrats, including the Clinton-Gore campaign, and to tax evasion.

Chung said after he began to cooperate with the Justice Department that he was threatened and offered money from Beijing "to take care of" his legal expenses and family if he refused to cooperate with the FBI.

Chung said the threat -- and an introduction to a defense attorney who claimed to have Justice Department connections -- came from a man who indicated he was connected to Ji.

Chung said that after he pleaded guilty and was cooperating with the FBI, he was contacted by Robert Luu, a U.S. citizen in Beijing, who said he was helping Liu Chao Ying, the Chinese woman who introduced him to Ji.

Luu "starting talking about a Commander Lee, who wanted to take care of me," Chung said. "The message was as follows: 'If you keep your mouth shut, you and your family will be safe.'"

Chung said Luu also introduced him to a well-connected former Watergate lawyer, whom Chung didn't name. Chung said he met at least a dozen times with Luu, who never gave him any money.

Chung said after the meetings, the FBI believed that Chung and his family were in danger and put them in protective custody.

Chung also testified that a Beijing banker told him that former Little Rock, Arkansas, restaurateur Charlie Trie approached the Chinese government sometime before February 1996 asking for $1 million to support Clinton and the Democratic party.

Trie owned a restaurant near the state capitol in Little Rock that Clinton often went to when he was Arkansas governor. In 1996, Trie tried to give $600,000 from questionable sources to Clinton's legal defense fund, which rejected the donations. Trie goes on trial next Monday in Little Rock, charged with obstructing a U.S. Senate investigation into campaign fund-raising abuses by ordering the concealment of subpoenaed documents in Arkansas.

Chung, a Taiwanese-born U.S. citizen who runs a broadcast fax business in Torrance, California, is the first Asian-American fund-raiser to publicly testify about his dealings with elite Chinese business and political figures. He is the latest witness in the ongoing probe of the 1996 campaign finance scandal by the House Government Reform Committee chaired by Rep. Dan Burton, (R-Indiana). Burton said the Chinese embassy bombing should not get in the way of the committee's probe.

"The Chinese government's actions should not be overshadowed or forgotten because of this terrible mistake," Burton said in his opening remarks.

In his prepared opening statement that he read before the committee, Chung said that between 1994 and 1996 he received more than $2 million as a result of his business relationships in China, but less than 20 percent of that sum wound up as donations to political causes.

Most of the funds given to him went to pay his own business expenses as well as the costs associated with entertaining the various Chinese business groups that sought to do business with him, he said.

"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," Chung said.

A recently prepared bipartisan report of the Senate Intelligence Committee said "most of the remaining funds went for his personal use, including mortgage payments." The report also said that Chung's allegation that he'd been given the money to assist in the election of Clinton "is contrary to his previous statements."

Chung said that his actions had been misrepresented by the media. He said the people that he brought to fund-raisers were impressed by his ability to get photographs with high governmental officials and to make business and political contacts. In China, pictures with high governmental officials "are worth their weight in gold," he said.

Chung said that some people understood that donations would be made to gain access for photographs and contacts. The people were "willing to provide significant sums of money to get this photo," he said.

Chung also called for changes in the current campaign finance system, saying Congress has done nothing to change the system despite the ongoing campaign finance scandal.

"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," Chung said, adding that he certainly shared some responsibility for the current scandal.

Chung contributed $360,000 to the Democratic Party and visited the White House more than 50 times from 1994 to 1996. Chinese business executives frequently accompanied him.

In one instance, Chung brought five Chinese businessmen, most officials of government-controlled companies, to hear Clinton tape a radio address in March 1995. In a White House visit two days before he was admitted for the radio address, Chung handed Hillary Rodham Clinton's chief of staff, Margaret Williams, a $50,000 contribution.

Chung "often sort of hung around the anteroom of the first lady's office," then-White House spokesman Mike McCurry said in 1996 at the start of the campaign finance controversy. McCurry said Chung apparently tried "to portray himself as someone who had greater influence than the facts would allow."

However, referring to the president and Mrs. Clinton, who have both been photographed with him, Chung said: "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."

Chung also chastised the DNC, saying: "I think 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 1996."

"I now realize that they took my money with a smile and made fun of me when I turned my back," Chung's said.

The White House had no public reaction to Chung's testimony. White House officials tell CNN privately felt that the less said about Chung's testimony the better and that there is no proof anyone at the White House knew of the Chinese connections to the funds.

Last year, he pleaded guilty to election law violations and began cooperating with the Justice Department's investigation into alleged 1996 fund-raising irregularities. Chung could have been imprisoned for 37 years and fined $1.45 million. He was sentenced to five years probation and 3,000 hours of community service, which was noted during the hearing as a sentence the government asks for witnesses who have been cooperative.