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RNC Returns Contributions With Hong Kong Connection

By Lena H. Sun and Dan Morgan
The Washington Post

The Republican National Committee and two other GOP organizations announced Thursday that they are returning $122,400 in campaign donations after learning that the source of the funds was a Hong Kong company with little or no assets in the United States.

The action came after months of GOP pounding on Democrats for questionable fund-raising tactics among Asians and Asian Ameri-cans. Republican officials strenuously denied any parallels with the tribulations of the Democrats, and one GOP official said accepting the contribution from the Hong Kong company was "the equivalent of inadvertently stepping on the out-of-bounds line in a basketball game."

As Republicans sought to explain the Hong Kong connection, however, it was learned that GOP officials tried to solicit funds from a range of foreign businesses for a defunct nonprofit political organization tied to the RNC and its former chairman, Haley Barbour. Records of the organization, The National Policy Forum, have been subpoenaed by the Senate committee investigating campaign fund-raising abuses.

The solicitation of foreign funds for the NPF was legal. But the effort to raise the money for a group so closely associated with the GOP, at a time when it controlled the legislative and policy agenda in Congress, has led Democrats to call for more intensive investigation of Republican fund-raising practices.

The NPF was founded by Barbour in 1993 and heavily subsidized with RNC money. Thursday, a source close to Barbour confirmed that "an effort was made to solicit" funds for the NPF from non-U.S. corporations. But the source said "the effort did not succeed." How widespread the approaches were is unclear, but Barbour reportedly has named Toyota and "Taiwan money" as examples of possible sources of contributions to the NPF.

In 1994, with the NPF strapped for cash and deeply in debt to the RNC, GOP officials turned to Young Brothers Development-USA, a Florida-based affiliate of Young's Hong Kong company, to guarantee a private bank loan to the NPF.

Young, who advises American multinationals doing business in Asia, was raised in Taiwan and later moved to the United States, where he became a U.S. citizen and donated heavily to the GOP, becoming a member of "Team 100," the elite group of contributors of $100,000 or more. One of Young's sons is also a Team 100 member, GOP officials said. Several years ago, Young gave up his U.S. citizenship and moved to Hong Kong.

The 1994 loan guarantee from Young's company enabled the NPF to repay $1.6 million to the RNC in October, 1994, when the RNC needed funds to finance tight congressional races vital to the GOP's November takeover of Congress.

Over the next several months, the NPF journal Common Sense published two lengthy articles by Young on the importance of U.S. policy toward China, Hong Kong, and Taiwan.

Young then accompanied Barbour on an official RNC trip to Beijing in January 1996, and met with Chinese Foreign Minister Qian Qichen. Chinese officials also hosted a dinner in the Great Hall of the People, Barbour said.

Shortly after the Barbour visit to China, the private bank called in the loan to the National Policy Forum, and Young Brothers Development-USA, as the guarantor, was forced to pay $500,000.

Federal election law allows foreign subsidiaries to contribute to U.S. elections only if the money is generated in this country.

In addition to $102,400 that the RNC said it was returning, the National Republican Congressional Committee and the National Republican Senatorial Committee, political arms of House and Senate Republicans, said they would each return $10,000.

Democrats, battered by months of embarrassing disclosures about their own fund-raising practices, zeroed in on Republicans.

Rep. Henry A. Waxman of California, the House Government Reform and Oversight Committee's top Democrat, blasted panel chairman Dan Burton, R-Ind., Thursday for not seeking subpoenas to investigate the Young Brothers contributions.

In the Senate, Chairman Fred Thompson, R-Tenn., of the Governmental Affairs Committee, Thursday approved the issuance of six new subpoenas, including ones for Young and his U.S. and Hong Kong companies. Thompson rejected a Democratic request to issue a subpoena to Barbour.