HK bank linked to Clinton cash

PUBLISHED : Thursday, 22 March, 2001, 12:00am
UPDATED : Thursday, 22 March, 2001, 12:00am

A Hong Kong bank partly owned by the mainland Government has been named as the key siphon for illegal donations that helped Bill Clinton become US president.

The involvement of the Hong Kong Chinese Bank emerged after Indonesian billionaire James Riady pleaded guilty in the Los Angeles Federal Court this week to US campaign finance violations.

Mr Riady was put on probation for two years and ordered to pay record fines of US$8.6 million for his part in the scandal that rocked the Democratic Party. Foreign campaign contributions are illegal under US law.

Court papers revealed that millions of US dollars to presidential and congressional campaigns were diverted through the Hong Kong Chinese Bank and LippoBank California, according to legal sources in Los Angeles.

The revelation that Mr Riady, whose family owns the Lippo business empire, was involved spurred lurid stories that Chinese government agents were caught up in events. Lippo part owns the Hong Kong Chinese Bank with China Resources, which is owned by the mainland's Trade Ministry.

This link fuelled Republican suspicions that the Chinese had been trying to influence the 1996 US presidential elections. The outcry infuriated Beijing and led Premier Zhu Rongji to denounce the allegations in 1999.

Although the court documents make no reference to these claims, it is understood that US government attorneys are still investigating some of these links. Mr Riady has agreed to co-operate with investigators.

In Los Angeles, assistant US Attorney Daniel O'Brien said: 'Oh yes, there will be further inquiries. I informed the court yesterday that we have decided to schedule additional debriefings of Mr Riady.'

He refused to divulge the nature of the investigations, but it is understood officials are keen to establish the full paper trail from Hong Kong to the US. Mr O'Brien said nothing disclosed to them had indicated that bank officials had acted improperly.

There has never been any suggestion that the recipients of the funds knew they were illegal.

Mr Riady agreed to the plea-bargain deal after former Lippo official John Huang pleaded guilty and agreed to give evidence against his former boss.

Mr Huang was a Democrat fundraiser who raised large sums for the party. He claimed Mr Riady offered Bill Clinton a US$1 million campaign donation. Mr Clinton later told investigators he had no recollection of the pledge.