Riadys drop plan to buy U.S. bank

Riadys drop plan to buy U.S. bank

NEW YORK (AP): Longtime Indonesian supporters of President Bill Clinton dropped their plan to buy a California bank after their family's name was linked to the Democratic Party campaign finance scandal, The New York Times reported yesterday.

Business associates told the Times that the Riady family decided to postpone the deal, which would have run into the billions of dollars, because it feared its strong ties to China and history of regulatory problems with other banks it owned in this country would become embroiled in the scandal.

The family had decided it needed to control a bank accessible to the West Coast residents it hopes to do business with in Indonesia, China, and elsewhere in Asia, Riady associates told the newspaper.

Family members were in the process of contacting banks in California about a purchase when the campaign finance scandal surfaced.

The Riadys and their U.S. representative, John Huang, have been the focus of campaign finance inquiries since it was disclosed that the Indonesian family used its influence to get Huang a job in the U.S. Commerce Department.

The report that the Riadys planned to invest hundreds of millions of dollars in the bank was the first indication the family might have required the help of government agencies and regulators.

It was previously unclear why the family would want to influence Washington, except to impress colleagues back home with its U.S. connections, according to the report.

The White House special counsel, Lanny Davis, told the newspaper he "did not have the ability today" to determine whether President Clinton or first lady Hillary Rodham Clinton were aware that the Riadys intended to buy a bank.

The acquisition also would have required approval from regulators who had repeatedly criticized the Riadys' banking practices over the past decade.