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Union Calendar No. 471 105Th Congress, 2D Session –––––––––– House Report 105–829

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Union Calendar No. 471 105Th Congress, 2D Session –––––––––– House Report 105–829 Union Calendar No. 471 105th Congress, 2d Session ±±±±±±±±±± House Report 105±829 INVESTIGATION OF POLITICAL FUNDRAISING IMPROPRIETIES AND POSSIBLE VIOLATIONS OF LAW INTERIM REPORT SIXTH REPORT BY THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT together with ADDITIONAL AND MINORITY VIEWS Volume 3 of 4 November 5, 1998.ÐCommitted to the Committee of the Whole House on the State of the Union and ordered to be printed INVESTIGATION OF POLITICAL FUNDRAISING IMPROPRIETIES AND POSSIBLE VIOLATIONS OF LAWÐ VOLUME 3 OF 4 1 Union Calendar No. 471 105th Congress, 2d Session ±±±±±±±±±± House Report 105±829 INVESTIGATION OF POLITICAL FUNDRAISING IMPROPRIETIES AND POSSIBLE VIOLATIONS OF LAW INTERIM REPORT SIXTH REPORT BY THE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT together with ADDITIONAL AND MINORITY VIEWS Volume 3 of 4 November 5, 1998.ÐCommitted to the Committee of the Whole House on the State of the Union and ordered to be printed U.S. GOVERNMENT PRINTING OFFICE 51±332 WASHINGTON : 1998 COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT DAN BURTON, Indiana, Chairman BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California J. DENNIS HASTERT, Illinois TOM LANTOS, California CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, JR., West Virginia CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York CHRISTOPHER COX, California EDOLPHUS TOWNS, New York ILEANA ROS-LEHTINEN, Florida PAUL E. KANJORSKI, Pennsylvania JOHN M. MCHUGH, New York GARY A. CONDIT, California STEPHEN HORN, California CAROLYN B. MALONEY, New York JOHN L. MICA, Florida THOMAS M. BARRETT, Wisconsin THOMAS M. DAVIS, Virginia ELEANOR HOLMES NORTON, Washington, DAVID M. MCINTOSH, Indiana DC MARK E. SOUDER, Indiana CHAKA FATTAH, Pennsylvania JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland JOHN B. SHADEGG, Arizona DENNIS J. KUCINICH, Ohio STEVEN C. LATOURETTE, Ohio ROD R. BLAGOJEVICH, Illinois MARSHALL ``MARK'' SANFORD, South DANNY K. DAVIS, Illinois Carolina JOHN F. TIERNEY, Massachusetts JOHN E. SUNUNU, New Hampshire JIM TURNER, Texas PETE SESSIONS, Texas THOMAS H. ALLEN, Maine MICHAEL PAPPAS, New Jersey HAROLD E. FORD, JR., Tennessee VINCE SNOWBARGER, Kansas ÐÐÐ BOB BARR, Georgia BERNARD SANDERS, Vermont DAN MILLER, Florida (Independent) RON LEWIS, Kentucky KEVIN BINGER, Staff Director BARBARA J. COMSTOCK, Chief Counsel DAVID A. KASS, Deputy Counsel and Parliamentarian LISA SMITH ARAFUNE, Deputy Chief Clerk PHIL SCHILIRO, Minority Staff Director MAJORITY STAFF MINORITY STAFF KEVIN BINGER, Staff Director KRISTIN L. AMERLING, Minority Counsel BARBARA JEAN COMSTOCK, Chief Counsel KENNETH M. BALLEN, Minority Chief JAMES C. WILSON, Chief Investigative Counsel Investigative Counsel DAVID A. KASS, Deputy Counsel and PHILIP S. BARNETT, Minority Chief Counsel Parliamentarian COURTNEY A. COOK, Minority Staff Assistant MICHAEL BOPP, Senior Investigative Counsel SARAH DESPRES, Minority Counsel J. TIMOTHY GRIFFIN, Senior Investigative JONATHAN M. FRENKEL, Minority Counsel Counsel HAROLD W. GOSSETT, Minority Professional KRISTI L. REMINGTON, Senior Investigative Staff Member Counsel CHRISTOPHER P. LU, Minority Counsel ELLIOT S. BERKE, Investigative Counsel MICHAEL J. RAPHAEL, Minority Counsel ROBERT J. DOLD, Investigative Counsel ELLEN P. RAYNER, Minority Chief Clerk JASON HOPFER, Investigative Counsel JESSICA R. ROBINSON, Minority Staff JOHN IRVING, Investigative Counsel Assistant RAE OLIVER, Investigative Counsel DAVID SADKIN, Minority Counsel JIM SCHUMANN, Investigative Counsel PHILIP M. SCHILIRO, Minority Staff Director MICHELLE E. WHITE, Investigative Counsel ANDREW H. SU, Minority Research Assistant DUDLEY HODGSON, Chief Investigator AMY R. WENDT, Minority Staff Assistant MILT COPULOS, Investigator BARBARA A. WENTWORTH, Minority Research KEVIN DAVIS, Investigator Assistant G. ANDREW MACKLIN, Investigator MICHAEL T. YANG, Minority Counsel JOHN T. MASTRANADI, Investigator MICHAEL J. YEAGER, Minority Counsel MATT TALLMER, Investigator THOMAS P. BOSSERT, Assistant to Chief Counsel JASON FOSTER, Assistant Systems Administrator LAUREL GROVER, Staff Assistant KENNETH FENG, GAO Detailee ROGER STOLTZ, GAO Detailee RICHARD D. BENNETT, Special Counsel to the Committee ii LETTER OF TRANSMITTAL HOUSE OF REPRESENTATIVES, Washington, DC, November 5, 1998. Hon. NEWT GINGRICH, Speaker of the House of Representatives, Washington, DC. DEAR MR. SPEAKER: By direction of the Committee on Govern- ment Reform and Oversight, I submit herewith the committee's sixth report to the 105th Congress. DAN BURTON, Chairman. (III) C O N T E N T S Page Preface ...................................................................................................................... 1 Chapter I: Introduction ........................................................................................... 5 Chapter II: Unprecedented Obstacles to the Committee's Investigation ............ 47 Chapter III: The Democrats' Failure to Return Illegal Campaign Contributions ........................................................................................................ 149 Chapter IV: Unprecedented Infusion of Foreign Money Into the American Political System .................................................................................................... 1185 Part A: The Riady Family and John Huang: Access and Influence with the Clinton White House .............................................................................. 1185 Part B: Yah Lin ``Charlie'' Trie and His Relationship with the Clinton Administration .............................................................................................. 1347 Part C: Johnny Chung: His Unusual Access to the White House and His Political Donations ................................................................................. 1671 Part D: The Sioeng Family's Contributions and Foreign Ties ...................... 2131 Chapter V: The Failure of Government Agencies to Vigorously Pursue Cam- paign Violations .................................................................................................... 2933 Part A: Jorge Castro's Illegal Campaign Contributions, and Why They Were Never Prosecuted ................................................................................ 2933 Part B: FEC Enforcement Practices and the Case Against Foreign Na- tional Thomas Kramer: Did Prominent DNC Fundraisers Receive Spe- cial Treatment? ............................................................................................. 2983 Chapter VI: The Hudson Casino Rejection ............................................................ 3111 Chapter VII: Procedural Background of the Campaign Finance Investigation .. 3863 VIEWS Additional views of Hon. Dan Burton .................................................................... 3881 Additional views of Hon. Pete Sessions ................................................................. 3920 Minority views of Hon. Henry A. Waxman, Hon. Tom Lantos, Hon. Robert E. Wise, Jr., Hon. Major R. Owens, Hon. Edolphus Towns, Hon. Paul E. Kanjorski, Hon. Gary A. Condit, Hon. Bernard Sanders, Hon. Carolyn B. Maloney, Hon. Eleanor Holmes Norton, Hon. Chaka Fattah, Hon. Elijah E. Cummings, Hon. Dennis J. Kucinich, Hon. Rod R. Blagojevich, Hon. Danny K. Davis, Hon. Thomas H. Allen, and Hon. Harold E. Ford, Jr .......... 3923 Additional views of Hon. Thomas M. Barrett ........................................................ 4878 (V) Union Calendar No. 471 105TH CONGRESS REPT. 105±829 2d Session HOUSE OF REPRESENTATIVES VOL. 3 OF 4 "! INVESTIGATION OF POLITICAL FUNDRAISING IMPROPRIETIES AND POSSIBLE VIOLATIONS OF LAW NOVEMBER 5, 1998.ÐCommitted to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. BURTON, from the Committee on Government Reform and Oversight, submitted the following SIXTH REPORT together with ADDITIONAL AND MINORITY VIEWS On October 8, 1998, the Committee on Government Reform and Oversight approved and adopted a report entitled, ``Investigation of Political Fundraising Improprieties and Possible Violations of Law.'' The chairman was directed to transmit a copy to the Speaker of the House. (2931) CHAPTER V, PART A THE FAILURE OF GOVERNMENT AGENCIES TO VIGOROUSLY PURSUE CAMPAIGN VIOLATIONS JORGE CASTRO'S ILLEGAL CAMPAIGN CONTRIBUTIONS, AND WHY THEY WERE NEVER PROSECUTED (2933) JORGE CASTRO'S ILLEGAL CAMPAIGN CONTRIBUTIONS, AND WHY THEY WERE NEVER PROSECUTED INTRODUCTION In the course of the Committee's investigation, we learned of an- other source of foreign moneyÐSouth America. The Committee learned that the New York District Attorney's Office conducted an investigation into the banking activities of the Castro family of Venezuela, and had uncovered evidence of illegal campaign activi- ties by that family. The District Attorney's Office turned this inves- tigation over to the Justice Department, which failed to pursue any charges against the key individuals involved. The Committee fol- lowed up on the New York District Attorney's investigation, and brought to light the facts of the Castro case. I. THE KEY PLAYERS A. ORLANDO CASTRO LLANES Born in Cuba, Castro Llanes was head of a wing of that nation's communist party until fleeing the island in 1959 following an al- leged dispute with Fidel Castro.1 After landing in Haiti, Castro Llanes went to Miami, and in 1961 or 1962, depending on the ac- count, arrived in Caracas, Venezuela with just $150 in his pocket.2 By the 1980s, Castro Llanes had become an influential business- man in Venezuela, earning a fortune in the insurance business. He began
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