or more and overnighted in the Lincoln Bedroom
(ten individuals and one couple were on both lists).
This was the first time the White House had been
used that way.
Clinton himself claimed that most of the guests
at the coffees and in the Lincoln Bedroom were
friends, many of whom happened to be major con-
tributors. He continued to say this even after the dis-
covery of a personal memo (after the Center for
Public Interest in 1996 charged him with misusing
the White House) he wrote after meeting Demo-
cratic National Committee (DNC) fund-raiser Terry
McAuliffe linking overnight stays at the White
House to money donated (the DNC in fact had pro-
jected income from overnight stays).
The Chinese Connection It is illegal to launder po-
litical donations through someone else. In the case
of the recipients, the illegality only occurs if they are
aware of the laundering. Thus, the most serious
scandal involved Vice President Al Gore’s fund-
raiser at Hsi Lai Buddhist Temple in Los Angeles (or-
ganized by Maria Hsia, later identified as a Chinese
agent). Though Gore initially made light of the
charges, in the end the DNC returned the tainted
money.
There were other Chinese money-laundering op-
erations as well. Johnny Chung received $300,000
from Ji Shengde, the head of Chinese military intel-
ligence, to pass on to Clinton and the DNC. A Macao
hotelier suspected of organized crime ties, Np Lap
Seng, gave $1.4 million to Charlie Trie, a longtime
friend of Clinton. James Riady, scion of the Indone-
sian Lippo Group (tied to Clinton friend Webb
Hubbell), gave Clinton and the DNC $700,000 in
- Papers released in 1998 indicated that this and
other contributions were for ending the trade em-
bargo with Vietnam. In 1996, Riady worked with
John Huang to supply another $1.6 million in laun-
dered contributions. Not all the laundered money
came from China: The $690,000 in laundered funds
arranged by Pauline Kanchanalak came from many
sources, including three Thai businessmen.
The final scandal involved influence peddling
rather than money laundering. Inevitably, there was
a great deal of this, as is generally true in politics.
There are legal consequences only if one can prove
that there was an explicit promise of action in ex-
change for money. In 1998, news came out that in
1996 Loral Space and Communications (whose
chief executive officer, Bernard Schwartz, was the
top Democratic contributor in 1997) and Hughes
Electronics provided secret rocket-guidance tech-
nology to China that could be used for space
launches as well as ballistic missiles. While a grand
jury was considering the matter, Clinton overruled
the Justice, Defense, and State Departments, ap-
proving such high-technology transfers to a poten-
tial enemy. Even many Democrats opposed this, in-
cluding future House Speaker Nancy Pelosi.Legal Consequences The key figures in the money-
laundering scandal either stonewalled or fled to for-
eign countries. Federal Bureau of Investigation
chief Louis Freeh compared these actions to the Ma-
fia rule ofomertà. Attorney General Janet Reno made
the controversial decision not to appoint an inde-
pendent prosecutor. As a result, there was no serious
pursuit of either Clinton or Gore. In regard to the
campaign finance scandal, they faced no charges or
impeachment, despite the efforts of a small band of
Republicans in early 1997.
The others involved fared less well. The DNC in
1996 returned a total of $2.8 million in illegal funds.
Many of the illegal contributors were convicted, in-
cluding Charlie Trie, James Riady, Pauline Kan-
chanalak, Maria Hsia, Johnny Chung, and John
Huang, though some (most notably Huang) basi-
cally received slaps on the wrists. The technology
transfers led to significant punishments for Hughes
and Loral.Impact The scandal probably reduced Clinton’s
vote in 1996, thereby depriving him of a majority of
popular votes, and the follow-up scandal involving
Norman Hsu in Hillary Rodham Clinton’s 2008
presidential campaign was undoubtedly made worse
by its similarity to the previous scandal. Without evi-
dence that Bill Clinton’s campaign was aware of ille-
gal contributions, there was no legal case against
Clinton, Gore, or their top campaign staff.Further Reading
Clinton, Bill.My Life. New York: Alfred A. Knopf,- Includes the former president’s perspective
on the scandal.
Harris, John F.The Survivor: Bill Clinton in the White
House. New York: Random House, 2005. Exten-
sive study of the Clinton presidency, including a
brief discussion of the campaign finance scandal.
Limbaugh, David.Absolute Power: The Legacy of Cor-
The Nineties in America Campaign finance scandal 143