fa * Contral toeiganece Agency fle} fey (23 eatin, (2 € ATE ee O60 92-50283 to February 1998 © fhe Honorable Fred Thompson Chaixman Committee on Governmental Affairs United States Senate Washington, O.C. 20519 Dear Mr. Chairman: This letter is in response to your 14 January 1998 request thet we conduct a classification review of a document that you plan to have the Committees adopt as part of the public report on the Committea‘’s investigation of campaign finance abuses. to have reviewed the 4 February L99BR redrafted varsion of she document (copy enclosed}. To the extent it contains intelligence information that we provided to the Comaittee, i have Getermined that it accurately portrays that information and can be made public without damage to intelligence equities, In making this determination, I take no position on the analysis or. conclusions contained in the document. The Cotmittea obtained information from a varlaty - of sources beyond the intelligence community and must draw its ovm conclusions from all. ef the information availeble to it.- I thank your staff for working with us to protece jntelligensce equities, Sincerely, Enclosure o f bo ADPROVED SOR HELEASE \ poy k DWE: SER 20047 ig L-233-P- 1K SECRET The Honerable Fred Thompson ppec| | {5 Feb 98} | | (OGC+98-50283) ve SECRET », Baethoeda has eh ML Paks Peete ‘pen es "HO G4sSary Ba Pobruary 9, 195% The Chinx Connection: Sunmart of Committee's Findings Relating to Efforts of the Feople's Republic of Chika to Influence U.S, Policies and Elections From its earlloat sages, the Conimittes's invertigution uncovered instances of political contributions made with foreign money, Elther conuibuting or soliciting this money have been individuals with buctieax or political thea to the PRC, who have excorted PRC officials and businessmen to mtectings with PrenidentClinton and Vice President Gore, and who hive otherwise facilitated efforts to shape United States policy towards China, The intelligence portion of the Committes's investigation coughu te deteraiine whether the foreign contributions and the PRO tlea were more colneideiee, or ifthe PRC was in some way behind any foreign political contributions. Whar the Comunittes leaned wal detived not fram cooperative withesses of the PRC, but from gathering information from our lew enforcement acd intelligence agencles and gpen sources. and piecing it together, Although the Committee received and reviewed a vast emoubt-of information, thers are nevertheless gapsiin what the Commlttea has gathered. And descobing these gape might lead to the inadvertent edisclosure of certain sources end methods used to obtain information about Chinese efforts, Mindful of these gaps, the Commities har endeavored to seport what jf has leaened falthfully and accurately, The Committes’s investigation in this area of necesuity proceeded behind closed doors, Virtually all of the information gathered ly the Committee was classified, much of it at top searet and compartmented levels, The Commmittes took extraordinary steps fo protect the information from disclosure, including lindting accesy to the information to Members and « very well number of appropriately cleared eteff, using secured fecllides to maintain materials and to hold briefings, meetings, aid hearings, and acceding toxmumerous special restrictons placed by the intelligence agencies regarding the handling of the ifformation. The Coounittes was aleo restricted as to what could be presented in public hearings because of the classified status of much of the relevant information. The same restrictions constrain what can be ahared 1a this report. Although hampered by time conttraints and motty cooperation irom some federal azencicn, the Committes, has 'kethered significant infonuation, Thy Committee deteonined Mort U.S, law enforcement and intelligence agencles abd open sourced that the PRC government fashioned « plan before the 1996 elections and that its goal tints to Influences our political process, ortemibly through stepped-up lobbying Afforts aad also finding ftom Beijing, Over time, the plan evolved and the PRO engaged in much shore than imply “lobbying.” Indeed, discussions took place and actions were taken thet ruggeet more then the original plan was being executed, and that a variety of PRC entities wore acting to influence U.S. clectlons. . Baeo-se 20103 WE asa lags FER ES SG BarS5E . Poe What follows ln a discussion of the Majority staff'a work and the Committee's findings in this ares, The discussion finn provides tontext for why the Committes purmed this eubject, by describing early media accounts of alieged foreign activitios and bricllngs provided in 1996 by the FAI to Members of Congress and the White House, Next, it addresses in abbreviated form some ofthe algniicant connections between the cumpalgn flnance investigation and the Greater China ereal, including the tes specific figures have to the PRC government, It then lays out what the Commilttes learned about the existence of a “China plan,” and about other, possibly-related activities undertaken by the PRC govesriment, ax well uz information regarding the implementation of the plan. Throughout the discumion, the Committee desoribes the significance it gees in afl of this, Owing to the sensitivity of the mbbject, the Committers has been unable to alare with the Amterioan people most, of the documentary of testimonial evidence that supports the following discussion, nor can itda ro now, Moreiver, the Committee will bs unable ta addrees the subject matter publicly much beyond the predize-wording of tha discumion that follows, However, 2 longer, more detailed, and clagsified account of the Cormmittes’a findings has been prepared and will bp maintained in secunrenviront, — During the investigation’s sarllect stages, several seemingly well-touroed pross reports desoribed the fund-raising efforts of overseas Chiners in this country sad speculated on their poxsible relationships tothe PRC, On Rebraary 13, 1999, the Washington Post Grat reported & link between foreign campaign monoy and the PRC government.2 Citing “officials familiar with the inquiry,” the article alleged, “A Justice Department investigation into improper political find- raising sctivities has uncovered evidence ther representatives of the People's Republic of Chins tought to direct contributions ftom Lorengn sources to the Democratic National Cammittes before the 1996 presidential campaign.” ‘The Rost observed that criminal investigators “nuspected & Chinese connection to the current flind-talaing scandal because several DNC contributors and niajor fund-ruisera had tles to Bejing,” qnd identified, in partheuler, Yah Lin “Charlie” Tile and John Huang. Other media. storia preceding the start of the Comnnittee's public hearings in July reported edditional details on covert Chinese plate to fund poldcal contributions in thix country, ‘The New York Times on March 13, 1997 wrote that “surreptitiously monitored” canversations between i For the purposes of this report, the term “Greater China” encompasses territories claimad or recently acquired by th; PRC, including Hong Kong, Macno, and the Republic of China on Talwan. 2 Bob Woodward snd Brien Duff}, “Chioese Embassy Bole in Contributions Probed,” ‘Washington Pou, February 15, 1997, pj AL ae-e9-50 Baas ; MEF, ASR. [ise FEB @9 98) @qe5SPH a3 Chinese official: here and in Bejing “suggested that Belling was prepared to take # drastic step: itopally finneling money to American politicians"3 Zine coporied in March thet “provocative” communications attong Chinese officials pleked up by American intelligence “indicated that front companies for the Chinese government tnight try to funnel ob." Who might heve directed this? According to the Washingiow Post, “op Chinese officials approved plans “to attempt to buy influence with American politicians,” and the plans continued through 1996 and to the present.$ Additional storied indicnted the ERI had commenced a foreign countecintelligence probe of the matter in 1996, briefing alx Mambez’s of Congress regarding the Bureny‘s belle “that the government of China may try to make cpuibutions to Members of Congress through Asien donors."6 The Bureau [ater briefed « wewouth Member in October 1996, The EBI also told the White Hours about the Chineas plan in fone 1996, when FRE agents briefed two representatives of the National Security Council, The HAI briedings described illegal plans for the clandestine funding of American political campaigny. Barly in the investigation, Comrbittes staif discovered « number of money trails thet led from the DNC and other Demacratic causes back overions, and, particularly, to Greeter Ching. The trails wend thair way from easy hae through one benk account after another, ending up mainly in DNC coffers, Committes taiftraced some of thease trails backwards a3 fir ex the transaction - generally a wire tandfer ~jthat brought into the United States finds eventually used to make political conteibutions.? 3s David Johnston, “U.S. Agency re Monitored Chinsse in “96 on Politleal Gifts," New York Times, March 13, 1597, p. At. 4 Rickard Lacayo, “What Did China Wast?”, Time, March 24, 1997, p. 48, $ Bob Woodward, “Top Chinese Linked to Plan to Buy Favor," Washington Poat, April 25, 1997, p. Ad. ' ' § ‘Brian Dudly and Bob Woodwark, “PHT Warned Sit on Hill About China Money,” Washington Post, March 9, 1997, p. Al. Sea also Lacayo, supra, p. 43 7 Although in several cases Comittee staff members Identified a fortiga account Uiat served sa the wource of 4 contribution to the DINC, they could not continue back to the actual trailboad when it was located overmeas since the Committee held no sucharity to compel production of foreign bank records, Hence, whether a contobuton that entered the 1.9. from an socourt in China, Hong Kong, Taiwan, Macao, Indonesia, of entice other country was connected in some wey to the PRO government eduld not ba determined Bom an examination of the records, 3 a2/8a-3e ao: as HO. a5 Fen oo Re Bassey : : Poa Commilttes staff identified severd! invtances of forsign money donations connected to six individuals with Hes to the PRC. Ag noted below, John Hoang, Marla Phila, Ted Stomp, and Tames and Mochtar Rady esch hava been aseociated in some wey with the Government of China, The sixth, Yah Lin “Charlie” Trio, is 2 Butlness partner of Ng Lap Seog, « Maceo businezeman with alloged ties to the PRC. Tre, whoirecently was indicted and arrested, excorted Wang um, head of China's principal arms trading cbinpany, Polytochnologieg, to a February 6, 1996 coffee with President Clinton aad a mseting thé same dey with Comunerte Secretary Ron Brown. In 1996, John Hoang eolielted admis $3.4 million in contributions to the DNC. Nearly balf this amount has been retumsed a0 the codtributions were determined by the DNC to have boon made with actual or suspected foreign finds. In September 1993, Huang wrote three chocks to the ONG, cach in the amount of $15,000, each paid with foreiga money. The checks wore drawn on the accounts of thres Lippo Group sidbaldiarles + Hip Hing Holdings, San Jose Holdings, and Toy Center Holdings, At the time the checks were written, all ofthe companies were losing foney and operating in the red, Hearing testimony from a Huang coworker indieates the money for the three contribution checks came Som Lippo accounts ln Jukarts.# In ahort, the 1992 checks Huang slgned wete paid with foceign money. ; ‘Huang's $45,000 in DNC contriutions was made fn cloxe proximity to Huang-errenged maetings betwaen Vice President Gore aod Shen Jneren, the head ofa commercial enterprice wholly owned and operated by the PRC!s Ministry of Forsiga Trade and Hoonomlt Cooperation, Called China Resources Holdings, Shedi’s company has bean identified as « PRC intelligence- gathering operation; one with reported fies to the People's Liberation Army.9 On Friday, September 24, 1993 ~ the day efter Huang wrote the first two $15,000 checks to the DNC — Huang escorted Shon Jucren to a WhitetHouse meeting with Gore and bis chief of ataff, Jack Quinn, The following Monday, September 27, 1994, Huang wrote anothar $15,000 check to the DNC. On the same day, Shon Jusren agsin mot with Vice President Gore, this time at a Santa Monica event organized by Huang and Maria Hale. The Riedys were Huang’s patrohs and mupporters throughout hur careers at Lippo and later the Department of Commerce andthe DNC. In fact, Temes Riady attended « small meeting in the Ovel Office on September 13, 1995, at which President Clinton'was aveod if ha -orould help Huang mave from Commerce to the DIRC. Preaddeot Clinton acceded to the request, and by the. end of the year, Huang became the DNC's vice-chalrmar of finance, a position created especially § Testimony af Juliana Utomo, July 15, 1997, 4 Nicholas Bttmisdes, Chiness Intelligence Operations, p, 80 (1994), Hftindades writes that Ching Resources Holdings traditionallypum' a PRC ouliury officer Installed as 8 vice president. It Khould alko be woted that, in £993, China Resources purchased a 50% ahere of the Hoog Hong Chinese Bank from the Lippo Group. Berea oe 2h 4 NY. 49a FER Wa 90 241 55Pr.. Pos for a ‘The Riadye were also for manyf years generous supporters of President Clinton and the Mazia Hila was involved in aolldding eoatibutions tw thie DONC ther were Lamdered through several Buddhist monke and may have derived from foreign sources, Ones the figures had been tallied for the April 29, 1996 Fa Lai Temple fiind-ralvar attended by Vice President Gore, it became apparent thar the event had not generated the level of contuibudons expected by the DNC. As areault, DNC Blaance Difector Richard Sullivan asked Huang to “get come California money in."10 Huang timed so Maria Hela, who engineered & schems whereby some $55,000 was contributed to the DNC by temple monastics who, In tum, were reimburted out of the Temple’s general experae accovat, fhe source of the Temple's money Is believed to be Buddhist devotees and may derive fromoveriens, Ted Sfomg was one of the DNO"s largest contributors duting the 1996 federal election cycle, Heis also distinguished as the DNC donor whose contributions are linked perhaps the most clearly to foreign sources. Sioeng: his family, and hiv business enterprises contributed $400,000 to the DNC in 1995 and 1996 Through a review of bank records, the Commitise hag determined that at least half or $200,000, ofthe DNC cantibotions was faded by trenafers fram overtesa accounts, In each oss, money was wired into « Siseng family account in the U.S, Bom the account of i Hong Rong company, Although the Committes knows little about the foreign companies that finded Sineng’s operaibas In this country, of of the business, Mansion House Socuritins, ix belicved to be owned in part by the Chiness government. : Yah Lin “Charlo” Trie algo solidted large amounts of foreign money. In Trie’s tase, the cause was the Presidential Legel Expense Truat, set up to help sotiefy the legal bills incurred by President and Mrs, Clinton. in March 1994, Tde brought nearly half'a million dollars in amall- denomination checks and money orderiito the law offics administering the Trust, The checks end money orders, it turned out, were written by followers of a Buddhist Sect walled Suma Ching Hai, . Many of the followers werw relmbutried in the amount of thelr contributions, Ubiimately, the reimbursement money came ftom accounts in Taiwan and Cambodia, None of the aforementioned ind]viduals would speak to the Committe shout their firnd- raising activities. Sioeng left the ee soon after the campaign finance scandal broke, ‘The Riadys likewise have stayed out of the United States, and declined te meet with Committers: stall workdag in Indonesia, Husng and Haslathave romained in this country but have both asserted their Fifth Amendment privilege tgainst selfnerimination, Tre initially left the country but recently returned and was arrested, Ho was inducted on January 28, 1998 and charged on 15 counts, including conspiracy to defraud the DNC and the United States, The indichnent charges Tris with partlelpating in the conspiracy by, among other things, purchasing access to bigh level povernment officials through contribudpns made to the DNC. 10 Deposition of Richard Sullivan,[fime 25, 1997, pp. 45-46. 3 PEE Fo Sos eas He BS Gaees-g8 fe BS KO, ass “mrp Bo 8S Ba:SeeH P68 information obtained by the Corhmittes reveals close ties between ths PRO and many of the individuals who praduced or facilitated foreign campaign camteibutions, And thess individuals ~ Téed Sioeng, Maria Hiis, John Huang, iend James and Mochtar Risdy ~ interacted with one~ another with some frequency. Their patha appear to have crossed most often when they were engaged in fimd-ralging or contributing money to the Democrats Netional Comumlttes, ‘ "Ted Sloeng.11 The Committee bas learned that Sloeng worked, and perhaps still works, on behalf of the Chinese government, Sloeng togularly communicated with PLC embassy and consular officials at various locations inkthe United States, and, before the campaign finance scandal broke, ho traveled to Heijing frequently where he reported to and wan briefed by Chinese communist party officials. The Consmittes is awere of'x hahdiial of activities Siseng undertook at the request of or with mupport from the PRC govanimeng. Pechapy the mont significant of theee activition was Sloerg’s purchags in late 1998 of The laternational Daily News, a Chinsse-language newapaper based inL.os Angeles. Prior ta Sioeng’s purchase of a commrolling interort in the papor, Ti International Dally News bad a pro-Tawyan dint. Sioeng changed that by bringing in new people and altering the paper's ideology to conform with the views of tht PRC government, After purchasing the paper, Sioeng subsidized it heavily, which was necensary due to ite operating losses.” Sioang financed the purchase arid mubsidizetion of the paper through transfers of funds from Rong Kong accounts. Sloeng and his family and busingss interests played a large role in the 1995 alectiona, They spent aver $550,000 on political dumpaigns and onganizations in 1995 and 1996, including $400,000 on the Democratic National Committee and $30,000 on the National Policy Forum. As discussed in greetor dotail elaewhore, Lathe Committre has subposaaed and reviewed volumisous bank and tuviness records relating to Sloeng, hs family, and their burlnesees, The Committes hat traced much of the money for these contributions to bank accounts in Hong Kong but no further. Hence, the Committee does not know Whether these contributions derived ftom or were directed hy the PRC government, Records reveal that the PRC contulate in Los Angeles paid Sloeng’s Hollywood Matropolitan Hotel $3,000 by a check dated March 22, 1996.13 The Commilttes has concluded that the PRC consulate provided Sioeng the mony for the pumpowe of making or iL Sa cleo chapter of report on Ted Sioong. 12 Ih 13 «$3,000. Bank of Chins check frdm tha Consulsta Genezal of the People’s Republic of Chins to the Hollywood Metropolitan Hotel, March 22, 1996. (Bx. 1). Ag-ee-pa 0 BEES NO. ao FER @F 'SA Bat STP as Stats Assembly, It appears that the PRC money waa in fact uted to make or reimburse a contibutton. to Wong in the amount of 85,000.14 Committes staff have no means to determing what other finds might have been provided to Sioeng by the PRC government through transfers among forsign account. : relibursing a political coanibution es Daniel Wong, Republican who ras for the Callforia ‘Ted Sioeng controls « budisess dmpire estimated to be worth approximately $500 million, ‘The Comunitten has foamed that Sioeng considered epending @ portion ofthis considerable wealth to support lobbying effpris approved by PRC officials, Maria Fisis. 15 ‘The Committes has learned that Hala bas been an agent of the Chiness government, that shy has acted knowingly in support of ff, and that sho has attempted to conces] her relationship with the Chinese goverbment, The Committee has alec learacd thet isis has worked in direct support of'a PRC diplématic port in the U.S. Asdesceibed elacwehere in the report, Hula bas been a aignificant Agure in the Comumittes"s investigation, and the Committes has condusted numerous interviews and depositions and exeinined voluminaus records relating to her, Heia first met Vice President Gore in the late 1980s, and organized « trip he attendedto Taiwan in 1989, She has raised money for the Democratic Senatorial Congressional Comunittes (‘DSCC"), and lobbied to have DSCC eontibutions earntacked for then-Senatbra Gare and Simon. On September 27 1993, aha attended the Santa Monica, California shecting with Vice President Gort, Jack Quinn, John Huang, and Shon Jueren. in oonnectiod with that meeting, Hsia contributed $5,000 in money illegally laundered through the Hei Lai Temple. os Hele has a long standing relatiogehig with the Hal Lat temple, Sha, with Huang, organized the. April 1996 fisnd-ralecr held thera ard attended by Vice President Gore, and bundered thousands of dollars ilegelly through temple clerics in connection with the event, The Committee hes identified over $130,000 in politicat contributions ilegslly laundered through temple monastics at Hela's direction, The Comimittes has received infarmation that Hea worked with Ted Siceng and John Huang to solid dontrbutions from Chinese nationals in the United States and shroad for Democratle choses, Hea and Huang, in particular, worked together to identify non-US, citizens oversess who might dontribute money to Democratic causes. YohnHusner 16 Since well betate its hearings began, the Committee focused’en Johs 14 $5,000 Grand Natlonal Bank cilock from Sundari, Sandee, and Laureea Elnitiarts to Dr. Daniel Wong, February 15, 1996. (Ex 2). ; 15 | Seale chapter of report on Maria Hein and the Hai Lai Temple. 16 See wlio chapters of report on the Lippo Group, John Huang at tha Department of Commerce, and Huang’s hiring by the DNC. Be eBo-G8 Saias ~ Mo, AS bat ER GF Sa G4: 57PH FB Huang, The goal was to underatand wity an executive at a xmtall Californix bank fowned by a large Indonesian conglomerate), who relied moncy prolifically for the Demoomtio party and pas rewarded with « political appolntment at the Department of Commerce, was ao often and wel] received by President Clinton and his aif The Conmittea's interest was furthor piqued by the fact that to date, the DNC as returned half of the money Huang raleed in 1996, The DNC has boon unable to verify that these finds dérived from « legal, domestic source, _ The Committee has examined indetall Husog's sctivities at Lippo, Commerce, and the DNC, A dingle plece of unverified infotmation shared with the Committes indicates thet Huang himself may possibly have had a direct financial relationship with the PRC government. The Commiittes’s information is not corroborated, tut nevertheless it adds to concemns regarding Huang’s activities at Commerce, which bvere a focus of Committee hearings In July 1997 and are . discussed elgewhere in thie report.17 Tntuss and Mochtar Riedy. 18 The Committee has feared from recently-acquired information that James and Mochter Riddy have had « lang-teren relationship with a Chinese intelligence agency. The relationship is based on mutual benefit, with the Riadys receiving assistance In finding business opportunitics In exchange for large sume of money and other help, Although the relationship eppears basod on business interests, the Committes understands that the Chinese intelligence agency seeks to lodhte and develop relationships with information collectors, particularly periong with clors conneetibas The Rindys ace central figures in the campéign finance ecandal for several reasons. First, they have close thes with President Clinton, James and Mochtir Riedy have known President Clinton alnce the mid-1980s when they field a controlling interest inthe Worthen Bank, ‘The Riadys have visited Clinton in the Whitd Hows on several occasions. Second, the Riadys were heevy contributors to. the DNC and other Democratic causen They maida and sollcited significant eontributions directly in connection with the 1992 elections, mibsequently, various Biady businesses, astoclates, and muployees did eewise. Third, they were the employers of John Huang, whom they helped place at the Departmant of Commerce, then the DNC. The foregoing indicates thet lenge amounts of money wera fuaneled Bom accounts in Greater China into the DNC by individuals who had cloas des to the PRC. This activity takes on grenter import when viewed'in light of the fact that the PRC government hed developed and 17 See chapter of report on John Huang at the Department of Commerce. 18 See sleo chapters of report on ths Lippo Group, John Huang at the Departmsut of Commercs, and Huang's hiring by the INNC. Sats 8 BaF rae ‘ FER ga Sa Gat S7ey BB implemented plang te influence the Us} political process before tagat of the aforemantionsd contthutions were made, Ths Commilites firs learned of thegs efforts carly inthe investigation. 19 ‘To understand the lun one needs to apprecinte the context Grom which it emerged. The plan ix intertwined with the stata of Ambsice's relationship in recent yours with the PRC and the Republic of Ching on Tetwan Althongn the United States maintains oo official tiss with the government on Taiwan, Telpei's views bave long inflaeneed U.S. diplomatic relations with the PRO, This ix largely became Bolling cdnsiders Taiwan & rogue province end suspects ft of séeking independence trom the malntenil, ” In May 1995, Len Teng-hui, Pedsident of the Republic of China on Taiwan, waa granted a visa to vialt tha United States, Caught Oi-quard, Beijing was quick to voice ite outrage atid to engage in « scrics Of overt retaliatory measures, Chine suspended arma contro} lke with Washington, postponed tross-Berais talka with Taiwan, canceled official visite to and from the — ey amassed troops along thé coest facing Taiwan, and recalled its ambassador to the United States, But not all of China's reactions pvare overt, Secretly, Bedilag worked to prevent similar diplomatic eurpriess from occurring in the future. Afler Prosident Lee's visit, high-level PRC government officials devined plans to intrease China's influence ower the U.S, political pricest and te be implemented by PRC diplomatic parts ln the U.S. ss: Sone of Beijing's efforts appear relatively innocuous, involving learning more about Members of Congress, redoubling PRClobbying efforts In the U.S, establishing closer contacts with the U8. Congres, and finding from Belling, But the Comituittes hus leemed that Befjing expected more than slimply increased lobbying from ity diplomatic posts ix the U.S. Inderd, as the Cormittee examined the ists in or detail, it found « brow! ercey of Chincas efforts devigned to influence 1.9. policies and [elections through, among other means, Anancing election The Comunittes’s understanding ofthe plan derives ftom U.S. Jaw enforcement and intelligence agencies, open sources, ang the Committeo's own investigative efforts, it is important to understand that thers ls ng consensus among the agencies concerning where the plan ends and other PRC activities in thie country begin. ‘The Commiittes hua learned in sobering detall of a widé range of covert PRC efforts ih the U.S. end overseas designed to influence elections in this country. Many of these activities hey or may not have been part of a single, coordinated pifort. Regardless, s courdineted approach may have evolwed aver time. Other effarta, though ’ 19 Senator Thompron made a public statement on July 6, 1997, disclosing the existence of Ching plan and related activities, The CLA and FBI edited the statement and authorized its public disclosure. . ag Dee eas | Ber ee ‘ A PM. RAE vend FER @@ "SG Gd:5E°N P.18 undertaken by PRO government eatitied, have been characterized sx rogue activities, Such fing distinctions fall beyond the scope of thik report, ey The Committes har identified specific steps taken in firtherancs of the plan. Implementation of the plans has been hatdied by PRC goverment officals and individuals enlisted to assist in the effort, Activities in fartterance of the plan have occurred both inside end outside the United States. : ‘Through the plan and related efforu, the PRC government aimed to increase China's influence in the United Steres, Some of the efforts were typical, appropriate steps foreign governments take to communicate thelt views on United States polity. Thay included retaining lobbying flimu, inviting mors Congresspersont to visit China, and attempting to communioate Beijing's views through medla channel in the United States. However, other efforts appear legal under U.S. Jaw, Although momt Miacussion of PRC activities focused on Congress, the Committes"s investigation nuggerts that Chin's efforts invobved the 1996 President race and state clectlons ae well, The Cormitted hus received information that the government of Ching may have allocated millions ofdollars if 1996 alone to achieve its objectives. The Commitee has learied of aeveral zctivitien China undertook to influence our politics! processes during the 1996 election cycle, Some of these inchide: « APRC governmont official devisedie seeding strategy, under which PRC officiala would orgenize Chinese communities in te U.S, to eacourage them to promote persons from their communities to fui in certain state jnd local elections. The intent behind the seeding program war to develop viable candidates sympathetic to the PRC for future federal elections; » The Government of China established the “Ceotral Leading Group for 0.9. Congressional Affairs” to coardiaate Ching’s lobbing efforta m this country. President Jiang Zemin approved the Group's creatlon, « AUS. agency mosived fragrmmntary reporting relating 19 China's efforts to influmes the U.S. Presidential election, The etscration is considered. part of a ctirsinal investigation and cannot be discussed with the Committee further; » PRC intelligence officials discussed inctessing China's lobbying efforts in the United States and planned to ralve millions of doljars to support those efforts, PRC officials mot with ane or more Chiness businessmen residing outside of mainland China to discuss raising the money and how it would be apent; 7 a LF) Be/09-59 26:88 fies eee FEg B59 ‘SR BdbSepe Pou « PRO officials diacutted fimnoing Agitican olections through covert means; ea hha trarufer af fasds may have occurred to a PRC-sontrolled account in, the US ; » APRC officlal involved ina discusdiog concerning Chinese lobbying afforts indicated an awareness that money placed in U9. banks can be traced by U.S, law enforcement officials, * APRC official encouraged ChincsorAmericuns to make political contributions and contact thelr Congressmen: aad * Beijing was angoced that ite diploritic officials in the 0.8, failed to foreormm the Mainland about the burgeoning campsigi finwace scandal and that those officials wore not aware of a who weatta Waahington, ).C, forthe purpose of lobbying or making political contibutions, _ ‘These activities show that severul different PRC government entities Joined the effort to involve thenwelves ln U5. elections and thet the PRC went well beyond lobbying to achieve its goals, Whether of not all of this was cantemplated af the outset by high-ranking Chinese officials ot almply evolved over time, it neverthéless happened, mad ins clandestine munner. It is clear that illegal foreign contributions were made to the DNC and that thoas contributions were fuodliteted by individuals with extensive tica to the PRO, ‘The original sources of many of these contributions were babk accounts in the Greater Ching area, * Ttis aleo clege that well before the 1996 elections, officials at the highest levels of the Chinese government soproved of efforts to increaue the PRC's involvernent in the 0.8, political process, There are indieations that themplan or parts of the plea and possibly-related PRC activities were implemented covertly intthis country, The individuals who ficilitated the contributions have either elected to take the Fifth Amendment or flee the country. Beijing has dented the Commitrea's request for ansjatance, Moreover, after ite hearlage concluded, the Committes learned that the Chinore leadership was pleased no PRC agencies have yet been implicated in the campaign isance acagdal, While the Committea still t datermnine conclusively whether the PRC fined, directed, or encouraged the illegal conirilutions in question, all of the information related herein, taken together, constitutes atrong cireiinstantial evidence thal tha PRC govermment was invoived. In addition, there are indications that Chinese efforta ln connection with the 1996 elections were undertakes or orchestrated, at lonat in part, by PRC intelligence agencies, It is likely that the PRO used intermediaries, particularly with regard to political contributions. This la v0 bocauae only U.S, citizens or legal permanent residepts can contribute lawfully to polities! parties and u + + BW it Aut ene te 4. Wi Fen @8 "Sa gatseen 12 cunpaigns. Moreover, the use of businbases and individuals as intermediation ix incromeingly common among Chinsse intelligence and military organizations.20 Given the way the PRC exerelses control over certain businereol and individuals, it hardly would be surprising to learn chat the PRC directed overseas Chineselto contribute to particular parties or candidates. In addition to furthering the goals of the PRC plan, such actions would seem within the capabilities ofa government able to implement private espionage and intelligenco-gathering activitica. _ ‘Throughout ite investigation, the Coramittes hea finmly believed i ls kmportant for the American people to be made aware of a4 much of the information set forth in this rection of the report at possible. Yot, getting to the bottom of such mattert and also ahuring the Commitice’s findings has been an extremely difficult procem, The firet difficulty derives fom the nature of the information itself’ Some of the information provided to the Committee requirea the protection of nources and methods used to gather ir, which has placed significant limits on the Commitzee's ability to discuss theag mattera publicly.« That protection is legitimate concern, but it has come at the cost of curtailing public knowledge and debate. ‘The Justice Department for the most part would not reveal matters that were tha subject of ite ongoing orlminal investigation. While Juatice’s concerts is understandable, it Hhiits Congressional oversight and makes it even core important that prosscutocial decisions bir handled in a way that enuures public confidence, The ascond difficulty is more edmplex and, wliimately, mons teoublesome, Tha Commitive dealt at length with vacious law eaforoeknent and intelligence agesicles In developing portions of the infonnation set forth above and obatrved a recurring problem: the fallure to share relevant, classified information. The failure meast that eo ons agency had a complete picture ofall the = relevant informacion in « particular wreatand, indeed, » given agency might be unaware of all the relevant information it held within ite vadous sections or departments. The clearest example of this involved the FSI and the Justice Dapactment, In two mejor instances FBT headquarters and Juaticn were unaware of crucial informdtion located in FRI field office files, information months and sometimes years old, ‘The information cam to light only a4 « result of persistent Comunittes probing, Thess lapses are currently the subject of a Department af Justice Cifice of Inspector General (OG) investigation. The Commirtes has cooperated with OIG investigators and will sontinus to miniter their progress, 20 © Bftimisdes, supra, pp, 27-43. This also well-catablished that the PRC wields influence over a wide range of entities and individuals, many of whom conduct business directly with the PRE. One ereg in which the PRC employs buslnceses 1s. oconomnia explonage. State-owned dr controlled companies ~ particularly thoke controlled by the People’s Liberation Army ~ are wed increasingly as part of & Chinese network to acquire Wester: techaolony in the United States and other countrjes. Jane's Defense Weekly, December 17, 1997, p. 1. Another ares le intelligence- gathering, where the PRC government bas attempted to cultivate members of the overseas Z Chinese community ax information soupees. Efimisdes, npra, pp. 27-43. 12 keer dhs ’ Pee og ‘S6 Bel cory The inability of the Bureau to lotate certaln intelligence information denied the campaipn finance ctiminal task fores timely accoupta important classified materiale, By the time the information wae surfaced and passed aldng, acme of all of it might have grown stale, It is the Committee's hops that, far the sxke of future oriminal investigations, steps are taken by intelligence and lew enforcement agencies to enfure that euch lapses do not reoceur. In that regard, the Committee intends to review any recommendations made by the O1G-an improving how auch Information is shargd.