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Published: Friday, 1/19/2001

The Indonesian connection

Referring to the Asian campaign fund-raising scandal that has pretty much enveloped President Clinton's two terms in office, a political wag suggested a while back that Mr. Clinton, before he leaves the White House tomorrow, might try to change the U.S. motto from “In God We Trust” to “In Dough Need Ya.”

The quip came to mind as James T. Riady, the scandal's “Indonesian connection,” pleaded guilty to conspiring to illegally funnel foreign cash to the campaigns of Mr. Clinton and other, mostly Democratic, politicians.

The scandal is testament to what happens when the influence of money takes over our political process, with either the knowledge or negligence of candidates, or both. And it ought to provide fresh impetus to campaign-finance reform legislation pending before the new Congress.

Riady, who heads the worldwide Lippo banking group, pleaded guilty to a single felony count and will pay a fine of $8.6 million, the largest ever for election-law violations. The group's LippoBank California agreed to plead guilty to 86 misdemeanor counts related to charges that Riady and former Lippo employee John Huang engineered a series of illegal contributions between 1988 and 1994. Huang previously pleaded guilty to similar charges.

Political contributions from foreigners are illegal, so Riady, through Huang, who at one time worked for the Clinton Commerce Department and the Democratic National Committee, reimbursed U.S. donors with Asian connections. About half of the $3.4 million Huang raised from the Asian-American community for the 1996 campaign was belatedly returned when the DNC couldn't verify that it came from legitimate domestic sources.

The scandal created a cottage industry for overheated allegations of espionage and treason from Clinton opponents. But it so far hasn't produced charges against the President himself or gained much traction with the American public because there was never any credible evidence that the recipients knew in advance that the money was coming from foreign sources.

The bottom line: Bill Clinton needed huge amounts of money to run for the White House in 1992 and 1996, and neither he nor his campaign operatives were particularly careful where they got it.

Riady, whose family invested in a Little Rock bank two decades ago when Mr. Clinton was governor of Arkansas, was eager to help. Now we know that the Riady family, companies, and associates gave the Democratic Party at least $840,000 from 1992-96. This should not be surprising since payoffs are standard procedure and a badge of honor in the political culture of many Asian countries. Indeed, Riady's prominence in the scandal is reported to have actually enhanced his political power and business prospects back home in Indonesia.

What did Riady get for his largesse? Outside of at least 20 visits to the White House, published reports say he has admitted that the money was used to buy influence with American politicians on a variety of issues, ranging from Most Favored Nation trade status for China to regulatory exemptions for the Los Angeles-based LippoBank. Court documents documenting his plea agreement admit that he believed the contributions were good for Lippo's reputation and business.

That's about as close as we'll ever see to a frank admission that our existing campaign fund-raising system amounts to what a lot of people believe it is: legalized bribery.



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