Probe looms over Riady's U.S. campaign donations

Probe looms over Riady's U.S. campaign donations

WASHINGTON (Agencies): House of Representatives Speaker Newt Gingrich predicted on Sunday that congressional and criminal investigations would be launched into a $425,000 contribution by Indonesian businessman James Riady to the Democratic Party.

"I think it's unavoidable that there will be congressional investigations, it is unavoidable that there will be a special counsel," Gingrich told CBS television.

"This makes Watergate look tiny.

"This is a potential abuse of the American system on behalf of an Indonesian billionaire in a way we have never seen in American history," he said.

The White House last week, responding to several press reports about campaign contributions, said the Clinton campaign had acted legally and dismissed questions about impropriety.

James Riady, whose family control the Lippo Bank and Lippo business group, contributed hundreds of thousands of dollars to Clinton campaigns since he was Arkansas governor, Newsweek magazine reports in its latest edition.

Newsweek also reported that the U.S. Import-Export Bank has issued letters of credit for $900,000 to Lippo Bank, which at one time also pushed for U.S. government financing for a $1 billion project to build a power plant in northern China.

Bank director Maria Luisa Haley, a Clinton appointee, told Newsweek the China deal fell through, but that a total of $900,000 in credit for other projects had been approved.

Newsweek said the Riady family declined to comment on its report, and the White House said there was no evidence that Clinton ever intervened to help them.

Riady's ties to Clinton have been fiercely attacked by Republicans, who say the wealthy Indonesian has exerted influence over the president by contributing to his political causes and his inauguration.

Attention has focused particularly on John Huang, a former vice chairman of Lippo's California banking subsidiary who moved on to become vice finance chairman of the Democratic National Committee.

Huang "has raised millions from Asian sources" for Clinton's re-election effort, Newsweek said, including a gift of $425,000 from Arief Wiriandinata, the son-in-law of a major investor in Riady's Lippo Group.

White House spokesman Mike McCurry told reporters on Friday suggestions that the Riady's family's support of Clinton was improper, bordered on an ethnic slur.

McCurry said Riady, a 39-year-old businessman who lives in Jakarta, got to know Clinton when he was Arkansas governor "and the fact that they became friendly and are among his supporters should come as no surprise."

U.S. campaign finance law is aimed at preventing foreigners from wielding influence in the U.S. political system, but there are loopholes that allow American subsidiaries to make donations.

Gingrich on Sunday said probes are likely into that matter as well as other campaign contributions from abroad.

He said the probes should find out "how many green card- holders have been solicited by the Clinton administration and are funneling Asian money from China, from Korea, from Indonesia into the Democratic Party to try to buy an election."

Gingrich also questioned the dealings of a former Clinton administration Commerce Department employee "who was the personal representative of this Indonesian billionaire" and is now a Democratic Party fund raiser.

The speaker also maintained that "the Department of Commerce cut a deal with China worth a billion dollars ... to this Indonesian billionaire."

Clinton campaign director Joe Lockhart, traveling with the president, said Gingrich should worry about his own ethics investigations in Congress about improper use of funds.

"I think Speaker Gingrich should have a pretty deep insight before he starts throwing stones about the ethical issues," Lockhart said. "He has had his own series of ethical problems, a very serious investigation about his ethical behavior. I think he should focus on himself for a while."