Donor Probe Sheds Light on Foreign Cash Flow

WASHINGTON — Carrying envelopes stuffed with bundles of $50 and $100 bills, a slightly built man with a stringy mustache left his Lincoln Plaza Hotel room in Monterey Park on an unusual quest: He was looking for volunteers to accept $10,000 in cash.

Antonio Pan’s trip on Aug. 15, 1996, took him through a number of middle-income Asian American communities in greater Los Angeles, where he stopped at businesses and called on distant acquaintances. He found one taker at a scrap-metal export shop in Alhambra. He located another at a used-car lot in Rosemead.

Within three days, Pan accomplished his mission, dispensing most of his $80,000 in cash. In exchange, he allegedly collected a small packet of personal checks made out to “DNC,” the Democratic National Committee, an entity that some of the check-writers had never heard of.

Pan’s cash-and-carry operation, described in records and testimony obtained by congressional investigators, depicts in stark detail how political operatives working for some Democratic fund-raisers were able to convert supplies of money flowing from overseas into contributions to the party’s 1996 national campaign.

Many of the controversial activities at the heart of last year’s campaign finance controversy involve complex and murky federal election laws. But the schemes unearthed by congressional investigators show, for the first time, in detail how foreign money was laundered before being contributed to the DNC.

Federal investigators say the clear-cut evidence is providing them with some of their strongest leads for criminal prosecution of election crimes.

The Justice Department is now investigating at least a dozen people for allegedly enlisting bogus donors or arranging illegal reimbursements. Investigators suspect that hundreds of thousands of dollars may have flowed into Democratic Party coffers through these methods.

The initial prosecutions in the campaign finance affair, anticipated as early as next month, are expected to target money-laundering, mail fraud and wire fraud violations.

The money-laundering chains used in the 1996 campaign were assembled by creative fund-raisers to address a dilemma. They had overseas businessmen who were eager to spend money for goodwill with American politicians but were not legal donors. The fund-raisers also had access to U.S. citizens with legal status as donors but without the money or the inclination to give. How to combine the two?

The operation involving Pan presented an efficient solution, according to witnesses and documents.

Records show the $80,000 originated in the Bank of China in the account of a Macau-based businessman. On Aug. 7, 1996, the money was wired to an account in the Riggs National Bank in Washington, D.C., held by Yah Lin “Charlie” Trie, a controversial Democratic fund-raiser and longtime friend of President Clinton’s.

The money was transferred on Aug. 15 to the American International Bank in Alhambra, where Pan, an associate of Trie, collected $60,000 in $100 bills and $20,000 in $50 bills later in the day.

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Before long, the money turned into donations. Personal checks in $5,000 and $10,000 amounts were winging to DNC headquarters in Washington for the campaign.

“This takes precinct walk-around money on big-city street corners to a new high,” said Richard Bennett, chief counsel of the House Committee on Government Reform and Oversight, which is investigating campaign money-laundering. “Now we have guys on jets with thousands of dollars in cashier’s checks floating around the country from abroad.”

Pan could not be reached for comment. He and Trie are among a handful of figures in the fund-raising controversy who are believed to be overseas and out of the reach of investigators.

By reconstructing Pan’s travels and telephone calls, Senate and House investigators have identified at least seven Asian American donors who wrote large checks to the DNC between Aug. 15 and Aug. 18, apparently at Pan’s request.

“Based on documents and testimony, it is clear that foreign money made its way from bank accounts overseas through Washington to Southern California, where it was collected by Antonio Pan and distributed to straw donors,” said Stephen J. Scott, a former Senate investigator now working for the House oversight committee.

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None of the seven donors had given money to the DNC before, and none attended the Aug. 18 event for which they supposedly gave--Clinton’s glitzy 50th-birthday party at New York’s Radio City Music Hall.

It is not known whether the suspected straw donors received any extra money for their trouble or were just helping out an acquaintance. It is not even clear if all of them understood what the checks were being used for.

Chen Chang Tu, the Alhambra scrap metal exporter, “was used by Antonio Pan,” Brian A. Sun, Tu’s attorney in Santa Monica, said. Sun added that Tu became “an unknowing and unwitting participant” in Pan’s plan to find conduit donors.

While Pan has received little attention during the fund-raising affair, he is no stranger to the White House or the Democratic Party. Records show he visited the executive mansion at least eight times between August 1995 and October 1996 and was in frequent contact with DNC finance personnel.

Pan was an associate of both Trie and another controversial Democratic fund-raiser, John Huang. Both Pan and Huang were former executives of the Indonesia-based Lippo Group, whose owners, the Riady family, were longtime supporters of Clinton. Pan also served as executive director of Trie’s America-Asia Trade Center Inc.

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Trie, a Little Rock, Ark., restaurateur, set up an international trading business shortly before Clinton was elected president in 1992. His overseas partner, Ng Lap Seng, was based in Macau and wired the money that ended up in Pan’s envelopes, investigators said.

At the time, Huang was working for the DNC finance division, and he and Trie were pressing to make the president’s birthday party a successful fund-raiser. (The event took in $10 million.)

Internal DNC records list Huang as the “DNC contact” and Trie as the “solicitor” for each of the $5,000 and $10,000 donations in this group.

The DNC has returned $40,000 to four of the seven donors identified, citing “insufficient information” about the appropriateness of their contributions. The party is reconsidering the status of the others.

“In light of the additional information brought to our attention by the Los Angeles Times, the additional three contributions are currently under review,” said Peter J. Kadzik, a DNC attorney.

Pan and Trie have been suspected in other money-laundering episodes.

Manlin Foung, Trie’s sister, testified in October that Pan sent her $25,000 in cashier’s checks to cover a donation to the DNC last year. Overall, the DNC has returned $645,000 solicited by Trie, and Clinton’s legal defense fund has sent back $639,000.

Still, Pan’s cash tour in August 1996 provides the most vivid example of how improper overseas money gets turned into legal-looking political donations.

Once Pan received the $80,000, his search for donors began in Los Angeles County. Five of the donors identified reside in Los Angeles suburbs, one in Washington, D.C., and one in Ohio.

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Quickly, Pan made a connection, through a mutual acquaintance, with Tu, the scrap metal dealer in Alhambra.

As a favor to a friend, Tu agreed to relieve Pan of $10,000 in cash that Pan claimed to be nervous about carrying, said a person familiar with the transaction. In return, Tu issued a check on an account he controlled bearing the name of Kun-Cheng Yeh, an associate at Tupen.

Yeh is reportedly in Taiwan. Tu had no knowledge of a scheme that appeared to be a “calculated or premeditated effort to do conduit donations,” said Sun, his attorney.

Sources knowledgeable about the federal investigation said Sun is negotiating with prosecutors on Tu’s behalf for immunity protection.

Pan also visited used-car dealer David Wang at the offices of C.H. Auto Sales in Rosemead. Wang, a Taiwanese-born U.S. citizen, testified on Oct. 9 before the House oversight committee that Pan asked him to write a $10,000 check to the DNC. Wang wrote one $5,000 check on his own account and another $5,000 check from the account of a Taiwanese friend, Daniel Wu, for whom he has power of attorney.

Wang’s attorney, Michael A. Carvin, said his client has testified before a federal grand jury probing allegations of money laundering.

The DNC has not returned these two donations because of questions about the source of the funds and Wang’s description of how the donations were solicited, party officials said. Wang stated previously on a DNC questionnaire that the money was his own. He also testified that John Huang first called him and then accompanied Pan to his office. Democrats said Huang actually was in New York that day. No evidence was introduced rebutting Wang’s statement that Pan picked up the checks and later dropped off the cash.

Another donor suspected of participating in Pan’s effort, according to congressional investigators, is Wei Fen Chou, formerly of La Habra. Chou wrote two $5,000 checks to the DNC on Aug. 15 and, according to Cathay Bank records, made $5,000 cash deposits on Aug. 16 and 17. He could not be reached and reportedly is in Taiwan.

Similarly, Monterey Park real estate agent Helen T. Chien wrote a $10,000 check to the DNC on Aug. 18 and made two $4,000 cash deposits on Aug. 15 and 17, in addition to a $2,000 check deposit. The DNC has not returned Chien’s money.

Asked about the DNC donation, Chien said in an interview, “I have no comment.” When asked about bank transactions indicating her donations were reimbursed, Chien said, “I don’t think this is L.A. Times’ business. It’s a personal matter.”

Congressional investigators said documents indicate that two donors outside California were reached by Pan.

Pan’s telephone records from the Lincoln Plaza Hotel show that he called the Ohio residence of Nelson and Kimmy Young on Aug. 14. Kimmy Young wrote a $10,000 check to the DNC on Aug. 16. That same day, the Youngs’ account received a wire transfer of $9,995.

Kimmy Young has told congressional investigators that Pan was a friend and that her husband used savings account money to pay for the donation. Kimmy Young’s attorney, Michael Miller, declined to say whether his client is cooperating with the Justice Department.

On Aug. 17, Qing Li of Washington made a $10,000 donation to the DNC. The money was returned to the U.S. Treasury on Oct. 20 after DNC officials were unable to locate Li and confirm whether he had the financial resources to make the contribution.

Internal DNC tracking forms list Trie and Huang as the solicitors. There is no record of Li making any other contributions to federal candidates.

The address listed on Li’s check is a decaying, abandoned three-story apartment building in a poor neighborhood north of Chinatown. A first-floor window was partially boarded up with plywood, and the only entrance to the entire building was locked and covered with a security screen.

Bunting reported from Washington and Rosenzweig from Los Angeles. Times staff writers Robert L. Jackson and Alan C. Miller in Washington and K. Connie Kang and researcher Janet Lundblad in Los Angeles contributed to this story.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Money Trail Leads to L.A.

How tens of thousands of dollars in Asian funds were shipped to the streets of Los Angeles County in August 1996 and converted into contributions for the Democratic Party in Washington:

1) $199,985 is wired from the Bank of China account of Macau businessman Ng Lap Seng to his partner, Democratic Party fund-raiser Yah Lin “Charlie” Trie, in Washington.

2) A week later, $80,000 is transferred from the Trie account to an Alhambra bank.

3) That same day, Trie associate Antonio Pan received $80,000 in cash from the account. Pan begins his search for straw donors in Los Angeles County.

4) Seven Asian American donors wrote a total of $60,000 in checks between Aug. 15 and Aug. 18, apparently at Pan’s request. Two $5,000 checks were written to the DNC from the account of Wei Fen Chou on Aug. 15.

5) Donors were reimbursed in cash. Bank records show two $5,000 cash deposits in Chou’s account on Aug. 16 and Aug. 17.

Sources: Bank records, federal election records and congressional investigators, Auto Club map