John Huang's Bamboo Network
Adams, James Ring
"John Huang's Bamboo Network" John Huang's Bamboo Network THE FALL GUY IN THE INDONESIA SCANDAL WAS MERELY THE ERRAND BOY OF BILLIONIARE ASIAN INTERESTS WITH LONGSTANDING TIES TO THE CLINTON CROWD. BY JAMES RING ADAMS Maybe...
...The International Relations Committee wants a look at any influence on foreign policy...
...Their misfortune was to enter the American market through a state whose business and political ethics more closely resembled Indonesia than the USA...
...If the overseas Chinese billionaires wanted to buy influence in the U.S., plenty of people around Bill Clinton were more than willing to sell it...
...In spite of lip service to the issue, Clinton didn't let it interfere with his Pacific region economic summit in Jakarta in November 1994...
...Was Huang still working for both Riady and Liem, or were the empires of the two tycoons as separate as they were telling American bank regulators...
...In the '6os, with Liem's help, Riady founded his own Lippo family of financial companies, now holding $12 billion in assets...
...Clinton has also downplayed the human-rights issue in East Timor, a territory brutally incorporated into the archipelago nation by the Indonesian army...
...He has brokered business through the MidSouth International Trade Association, a Little Rock entity represented by his law firm Arnold, Grobmyer & Haley...
...An independent source traveling with the Arkansas group has told TAS however that the meeting did occur, in the aftermath of a large reception on the day after the summit meeting...
...The preferred version now is Java...
...and giving the Clinton administration an unprecedented slush fund...
...The article has turned attention to an intrusion of Arkansas fundraisers into Taiwanese relations...
...His dominant role in the Chinese business clique, however, is undisputed...
...the other participants deny it...
...Was he involved in policy decisions that affected his former employers...
...and a consultant to the Lippo Group.1 Grobmyer's international connections have Little Rock roots...
...Although Riady barely turned billionaire last year, Liem, 8o, has long been one of the richest men in Asia...
...Hibernia developed problems and Liem sold it to Security Pacific Corp...
...Controversies over troubled relations with Peking claimed the top of the agenda, however...
...The Lippo scandal broke in October largely as a result of his exploits in raising $4 million...
...Connections like these will provide grist for hearings well into Clinton's second term...
...Senator from Connecticut, said he might make his employee available "some time later...
...Other outposts of the Bamboo Network show up in surprising places...
...These are questions that might also have been asked of the late Ron Brown, who may also have blurred the boundaries in his transition from Democratic National 26 December 199 6 • The American Spectator If Huang served two masters before 1994, at Commerce he may have served three or more...
...although he was born in Indonesia in 1929, his ancestral home is in Fujian, China, the southern coastal province where many of the richest overseas Chinese businessmen originated...
...From 1990 on, Huang mainly called himself an executive of Lippobank or Bank of Trade...
...Lim put up the $55 million seed money for the Foxwoods casino when no one else would touch the project...
...The office of Labor Secretary Robert Reich refused to give her time to speak...
...Grobmyer's wife is a close friend of Tipper Gore, and Grobmyer has said that he persuaded Clinton to choose Gore as his running mate in 1992.committed perjury in an attempt to cover up Clinton's involvement with the Riadys...
...James Riady and an Arkansas lawyer named Mark Grobmyer toured the area in 1993 and visited Clinton to discuss it...
...By the vagaries of election law, Huang the fundraiser is in far deeper trouble than the politicians who took his money, and there are already signs that if he decides to talk he can cut a wide swathe through Clinton's associates...
...But Liem/Salim has found other footholds in the U.S...
...Yet as late as 1993 he appears as an agent for Bank Central Asia...
...Even Huang's lawyer, John C. Keeney Jr., dropped out of sight...
...But Judicial Watch ran into a stone wall in subpoenaing Huang...
...Secret Service logs, leaked by someone hostile to Clinton, showed that Huang visited the Executive Mansion fifty or so times during the first nine months of 1996, sometimes staying for two or three hours...
...The Riady family, the focus of the campaign financing scandal, were rags to riches successes in a milieu which historically operated by bribery, influence-peddling, and profit-sharing with the relatives of the ruling generals...
...An even stranger story emerged in late October in a Chinese language newsweekly published in Hong Kong...
...In addition to the political sensitivity for Clinton, Commerce Secretary Brown had weathered charges in 1993 that the Vietnam government had paid him $700,coo to help lift the U.S...
...The International Finance Subcommittee of Senate Banking is asking about Ex-Im Bank financing of Lippo...
...The first thing to understand about the Indonesian billionaire Mochtar Riady and his three sons James, Andrew, and Stephen is that they belong to the elite but vulnerable Chinese minority...
...The group was led by University of Arkansas president Alan Sugg, not Webb Hubbell as the Senate investigators thought...
...His fortunes improved drastically when he went to work in the Bank Central Asia for the godfather of the Indonesian Chinese businessmen, Liem Sioe Liong...
...As many as a million Indonesians and Chinese might have died...
...The setting was the November 1994 Asian Pacific Economic Council summit in Jakarta, attended by Bill Clinton, the heads of state of the Pacific Rim countries, and a delegation of Arkansas notables...
...The story goes that Grobmyer was managing editor of the Arkansas Law Review and was asked to vacate his office to make room for Clinton, who had just been hired as a professor...
...Huang's subsequent career raises the question for whom he really worked...
...A year ago, we wrote about the Riadys' 1985 bailout of Little Rock's Worthen Bank, which put then-governor Bill Clinton permanently in their debt...
...Even the circumstances of his leaving Commerce underscore his importance...
...Lippo is a rising 24 December 19 96 • The American Spectator power in Hong Kong, for instance, where it recently sold half of its Hong Kong Chinese Bank to a corporation controlled by the People's Republic of China...
...As the inquiries progress they will undoubtedly find that the infamous John Huang was little more than an errand boy...
...The background of the publicity-shy Liem remains shrouded...
...managed to place a former senior employee of their Lippo Group inside the Clinton administration, with extraordinary access both to the Oval Office and to Asian contributors...
...Keeney is the son of the head of the Justice Department Criminal Fraud Division, profiled in the March 1996 TAS for his role in giving the run-around to the RTC's original criminal referrals on Madison Guaranty and James McDougal...
...Quoting an anonymous source who has since gone public, the magazine said that a financial officer of Taiwan's ruling Kuomintang Party offered to donate $15 million to the Democratic Party...
...The 55 million overseas Chinese, widely considered the world's hardest working entrepreneurs, are the engine of the "Tiger Economies" of South Asia, transforming Taiwan, Hong Kong, Singapore, and even Thailand and Malaysia...
...Another of his front companies, Hong Kong-based First Pacif25 O The real scandal is that American politicians were so eager to invite them in...
...k The American Spectator • December 1996 87...
...in 1988...
...The Washington trade bureaucracy postponed the issue for another six months, and then it disappeared...
...Liem's ties with the Indonesian generals began when he smuggled food, medicine, and possibly arms to their troops in the late 1940's war for independence...
...Suharto's New Order urged his Chinese allies to take Islamic sounding names...
...He worked for Lippo in Hong Kong in 1985as head of its World Banking Unit, a job which included acting as Far Eastern representative for Little Rock's Worthen Bank and director of international banking for the Hong Kong Chinese Bank Ltd., jointly owned by the Riadys and Jackson Stephens...
...The business and family connections of the "Bamboo Network" extend from Taiwan to Thailand...
...The 300 members of the Mashantucket Pequot Indian tribe in eastern Connecticut are famous for running the world's most profitable casino, grossing nearly around $600 million last year...
...to manage their California acquisition, The Bank of Trade (later renamed Lippo Bank California...
...Only later, and as slowly as the White House could manage, did it emerge how closely he worked with Clinton's people...
...is Holdings, in 1982 bought the Hibernia Bank in San Francisco (previously famous for being robbed by Patty Hearst and the Symbionese Liberation Army...
...But the focus on Huang obscured one central conclusion...
...Huang has said that he recused himself from Indonesian issues...
...In the '6o's he was quartermaster for a commander in central Java named Suharto, who was temporarily suspended because higher-ups questioned his extensive business dealings...
...Investigators will also ask where Huang got the money for his campaign giving...
...The White House blinked at a crackdown on veterans of the Tiananmen Square protests, and more dangerously, it turned a blind eye to Chinese help for Pakistan's attempt to build nuclear bombs and ballistic missiles...
...Bill Clinton...
...Liem has a partnership in Hong Kong with the Malaysian-Chinese developer Robert Kuok, who was named by Peking to the local committee overseeing the transition of the territory to Chinese control...
...Known locally as the Chairman, he was a business partner and mentor of five Indonesian families (including the Riadys) who became billionaires in 1995...
...In mid-October, Judge Royce Lam-berth ordered Huang and another former Commerce aide, Melinda Yee, to give depositions...
...As Suharto's business manager then and now, Liem is careful to make a place in his deals for the general's relatives...
...But other conduits are pouring Bamboo Network money into the U.S...
...Committee chairman to Commerce Secretary...
...The Foxwoods Casino is one of the three largest patrons of the Democratic National Committee, giving around $400,000 in the 1993-94 election cycle and ensuring tribal leaders ready access at the White House...
...Naturalized in 1976, he worked for several American banks before joining the Lippo Group in 1985...
...The question for coming investigations will be to whom he really answered in his career at the Commerce Department and the DNC...
...But John Huang, with his $4 million in DNC fund-raising and fifty visits to the White House, was a relatively small player in a network that included the richest men of South Asia...
...According to the Arkansas Democrat-Gazette, the Riady-Lippo file at the AIDC was more than five inches thick, containing hundreds of letters between James Riady and former Gov...
...The Indo-money affair is cut from the same cloth as the scandal of the Bank of Credit and Commerce International, which earlier this decade led to the bank fraud indictment of former Defense Secretary and presidential adviser Clark Clifford...
...Wal-Mart last year opened its first store in the high potential Indonesian market in a Riady development called Lippo Village...
...In mid-October, as reporters clamored to interview Huang, DNC co-chair Christopher Dodd, the Democratic U.S...
...Less well known is that their Foxwoods Management Co...
...For months afterward, peasants across the archipelago slaughtered suspected Communists, often settling scores with Chinese small shopkeepers...
...It wasn't known for a long time whether he was born in Java or Fujian, China...
...In the bustle of international business deals, says one local financial writer, every key player knows all the others...
...The DNC refused to give out his address...
...If these were major issues for the U.S., they meant billions in business for the Bamboo Network, and even the future of their way of life...
...Mochtar started his career in the 194o's in a Jakarta bicycle shop...
...It's not clear why the White House would deny it, unless to obscure yet another tie between Clinton and the Riadys...
...Mochtar's family name was Li or Lie...
...As the scandal broke, the extent of this complicity showed starkly in the attempts to shield Huang from the press...
...At the end of October, his whereabouts became the subject of a daily soap opera, as DNC officials toyed with the idea of keeping him in hiding until after the election...
...A Little Rock native, he is said to have met Clinton in 1975 at the University of Arkansas Law School...
...Gear sneakers...
...Mochtar Riady has personally taken the lead in opening trade with Vietnam...
...The Taiwan visits by Middleton and Trie also open new trails...
...In quantity and quality the Indomoney case dwarfs any influence-peddling scandal in memory, even for those who recall the worst of the Nixon years...
...The question is whether they will play by American rules when they come...
...If Huang served two masters before joining the government, at Commerce he may have served three or more...
...The mismatch between this largesse and the Huangs' estimated annual income reminds one of the case which kicked off this scandal —that of Indonesian "landscape architect" Arief Wiriadinata, who with his wife gave the Democrats $425,000...
...The source, a Chinese journalist, said he waspresent at the August 1, 1995 meeting where the offer allegedly occurred...
...The crux of the Indonesian money scandal isn't that foreigners were trying to buy influence in American politics...
...Their Hong Kong bank struck up a partnership with First Union Bank of North Carolina...
...And so far their American friends have given them exactly the wrong message...
...The BCCI was hying to buy hidden control of American banks to build its global empire and also to wield influence for its Arab patrons...
...Where things get shocking was in the arrogant response of the White House and the Democratic National Committee when the scandal erupted...
...Frankly, he's been so effective, I was amazed that you were all cheering for him tonight," Clinton told the gathering of Asian-American businessmen...
...The Chinese word for the secret is guanxi, influence with government officials...
...When the slumbering press awoke to the story (about a year after TAS put it on our cover), it discovered that the Riadys had JAMES RING ADAMS is a TAS investigative writer...
...A number of congressional committees are already staking a piece of the action...
...His donations as a BCA employee included $10,0oo to the Democratic Senatorial Campaign Committee and $2,000 to Pamela Harriman's Democrats for the 9o's, as well as $1,000 chunks for Albert Gore Jr., Alan Cranston, and North Dakota's Kent Conrad, and two $250 donations to Massachusetts Congressman Joseph Kennedy...
...But in the meantime he brought his own flagship (and Riady's training ground), the Bank Central Asia, into the U.S...
...Yet during his year and a half at Commerce, from July 1994 to December 1995, he had the clearance to make or monitor policy on a range of issues intensely interesting to Lippo and other potential donors...
...THE BAMBOO PIPELINE Even after the Worthen deal came undone, the Riadys kept up their American investments, and their contacts with Arkansas businessmen...
...After more than thirty years of relative stability and economic growth under Suharto, ethnic tensions are flaring again...
...he was more of an errand boy than a prime mover...
...The Huang trail may lead investigators to the cache of files removed from the Commerce Department after Secretary Brown's death and stored in a safe at the Small Business Administration...
...But nothing approaches the operation run by the former Lippo employee and mid-level Commerce Department official John Huang...
...They have been investing in Bill Clinton for twelve years, and one can understand why they would disregard American campaign law in the effort to preserve their stake...
...The deadline for a finding under the GSP was February 15, 1994...
...Jane Huang, identified as a Glendale, California, homemaker, even made this year's Mother Jones list of the 400 largest Democratic donors at number 262...
...A prime mover in the delegation was the Little Rock lawyer Mark Grobmyer, long a personal friend of both Bill Clinton and Albert Gore Jr...
...This level of access by any fundraiser may violate federal election law, but in the case of Huang it suggests that White House aides were his willing abettors...
...A common feature of the Bamboo investors is their generosity in making campaign contributions...
...The Clinton Administration decided to continue China's Most Favored Nation trade status in spite of a range of issues raised in Clinton's 1992 campaign...
...For just one example, White House aide Bruce Lindsey may already have Grobmyer, 46, will likely receive intense scrutiny in coming months...
...The Liem and Riady connections extend well beyond Jakarta...
...Trie, well known in Little Rock as proprietor of Fu Lin's restaurant, one of Clinton's favorites, now runs the Daihatsu International Trading Company, Inc., with offices in Little Rock and Peking...
...When she showed up as an attendee, security guards escorted her from the site...
...HUANG ON THE LAM Whatever Huang may have done for the Bamboo Network, he continued to have support from American politicians...
...But it's not simply ethnic ties and hard work that make figures like Liem so successful...
...He did a stint at the First National Bank of Louisville which might deserve some attention, because of that bank's important role in the scandal-prone southern Democratic fundraising complex...
...BY JAMES RING ADAMS Maybe it isn't really fair to judge Clinton's Indonesian contributors by the American company they keep...
...They obviously have the talent and business virtues to make a great contribution to the economy...
...A finding of persistent violations of labor rights could have caused the withdrawal of Indonesian trade breaks under the Generalized System of Preferences...
...Through their multi-layered Lippo corporate structure, they bought Southern California's Bank of Trade, renaming it Lippobank and developing clientele among several Asian-American communities...
...The confusion about Huang's employment shows up in his extensive list of personal political contributions from 1989 on...
...The other name partner, John H. Haley, is the former husband of Maria Haley, now a director of the Export-Import Bank, which has provided $900,000 in letters of credit for Lippo deals...
...Appointed in late 1995 over the objections of professional diplomats, he is now the focus of Justice Department and State Department Inspector General inquiries into whether he used his position to drum up campaign contributions for Clinton...
...The multi-billionaire Liem took a bath in the Worthen debacle, ultimately paying $3 million to the Federal Savings and Loan Insurance Corporation to settle a suit against his agent Giroir...
...By South Asian standards, they are solid, indeed, conservative businessmen and models of the ethnic Chinese work ethic...
...In principle, we would extend a welcome to this loose affiliation of millionaires and billionaires...
...The White House has refused to divulge who had authorized his visits...
...Since 1989, he and his wife Jane donated about $28o,000, all but $2,750 to Democrats...
...Through 1989, Huang identified himself as an employee of Bank Central Asia in his heavy schedule of campaign giving...
...He currently is said to have $250 million invested in the rapidly expanding company...
...Unpredictable Peking politics make Hong Kong an uncertain haven...
...In September 1993, as chairman of the Asian Bankers Association he led a delegation to Vietnam co-hosted by the Vietnam State Bank...
...This type of damage control ran into trouble, however, when it encountered a federal judge willing to use a contempt of court citation...
...Nevertheless, the U. S. moved apace in 1995 to exchange ambassadors and end the embargo...
...The Indonesian state of Jakarta made a "sister state" compact with Arkansas, and, according to the files of the Arkansas Industrial Development Commission (AIDC), former Governor Jim Guy Tucker wrote his counterpart to propose using an Arkansas parking-meter company to set up a parking system there...
...JUST THE BEGINNING Huang's deposition is surely just the beginning of months of congressional probes and possibly another Independent Counsel criminal investigation...
...The federal and New York State case against Clifford was later dropped because of his advanced age and the acquittal of his associate Robert Altman on similar charges...
...She and 23 other workers had been fired from a factory making Nikes for demanding to be paid the minimum wage...
...trade The American Spectator • December 1996 embargo...
...Haley is also a co-defendant with former Arkansas Governor Jim Guy Tucker in an upcoming trial arising from Tucker's cable company financing...
...Clinton administration spokesmen have been at pains to minimize Huang's duties at Commerce...
...According to the Washington Post, he decided to resign after a September 1995 Oval Office meeting between James Riady, himself, and Clinton...
...HUANG'S HIDDEN HAND...
...In a deposition to the Senate White-water Committee, Lindsey said that Clinton was scheduled to meet the Arkansans in Jakarta, but was told it was "a bad idea" and decided not to go...
...House Banking is examining why regulators put a disciplinary Cease and Desist order on the Lippo Bank California and then took it off within a year...
...In 1989 he left Los Angeles for New York to become general manager of the Bank Central Asia...
...But the 1965 putsch, a reaction to an alleged coup attempt by the powerful Indonesian Communist party, underscored the dangers facing a wealthy Chinese minority...
...Huang had the security clearance to be a strategic listening post well worth millions in campaign contributions...
...So the overseas Chinese are looking increasingly to the The American Spectator • December 1996 United States...
...Assistant U.S...
...Attorney Bruce Hegyi told the judge that his office didn't have the time to find Huang...
...Liem's fortunes rocketed after October 1965, when Suharto emerged as leader of a military putsch...
...Its expenses were paid by the Lippo Group, which also provided an official motorcade...
...Indonesia itself faced a labor-rights inquiry under U. S. trade laws into allegations of sweatshop conditions in factories making Nike, Reebok, and L.A...
...A public interest ethics group called Judicial Watch has had the Commerce Department in federal court for nearly (Continued on page 87) 27 Adams (Continued from page 27) two years on a Freedom of Information suit for records the group thinks will show that Ron Brown's export promotion trips were fundraising tools for President Clinton...
...To what extent did he mingle political fundraising with his official duties at Commerce...
...marshals to search for Huang at the DNC headquarters...
...By the end of Friday, October 25, Keeney got the message, and arranged to produce Huang the following week...
...But the biggest issues for the Riadys didn't concern Indonesia...
...JOHN HUANG'S CAREER In the weeks before the election, the mild-mannered Huang emerged as a poster boy for the DNC's alien fundraising scandal...
...Huang, 51, is a native of Taiwan who came to the United States in 1969 as a graduate student in business administration at the University of Connecticut...
...The cover story in Yazhou Zhoukan reported on fundraising visits to Taiwan by former White House aide Mark Middleton and former Little Rock restaurateur Charles Trie...
...it now does business in New York and Los Angeles...
...The real scandal is that American politicians, led by Bill Clinton, were so eager to invite them in...
...Although Mochtar Riady made his name at BCA and still served on its board, it is owned by Liem Sioe Liong's Salim Group...
...The current head of the American Institute in Taiwan, the de facto American ambassador, is a former Arkansas lawyer and friend of Huang named James C. Wood...
...After the collapse of the Riadys' Little Rock venture, Huang returned to the U.S...
...The Riadys and their allies had in addition the motive of sheer survival...
...In spite of his title as Principal Deputy Assistant Secretary for International Economic Policy, they say his job was strictly routine...
...His principal duties were administrative, managerial, handling budget, personnel and routine briefing materials," Anne Luzzato of Commerce told the Washington Post...
...is partly owned by the Malaysian Chinese gambling tycoon Lim Goh Tong...
...On October 24, an exasperated Judge Lamberth told Keeney to produce his client within 23 hours and ordered U.S...
...Middleton worked in the White House for then–Chief of Staff Thomas (Mack) McLarty III before joining a Washington investment broker called CommerceCorp International...
...Liem now operates under the name Soedono Salim...
...By embarrassing coincidence, two East Timor activists received the Nobel Peace Prize this October just as the Indonesian money scandal was breaking...
...Lippo also opened a fashionable business center in Saigon, now called Ho Chi Minh City...
...As it happens, The American Spectator had just published a cover story describing the Riadys as an influence on Clinton, and Huang as their man in Commerce...
...He was already a prodigious fundraiser while at Lippo, receiving a seat on the Democratic National Committee even though, as he told reporters, he was registered as an independent...
...He carried a public endorsement from President Clinton himself, who had praised Huang's "aggressive" soliciting at a July banquet in Los Angeles...
...It may well turn out that the Bamboo Network was less a corrupter of American politics than an equal partner with homegrown venality...
...WHO ARE THESE RIADYS...
...Even the Riadys were only one of several conduits in a political penetration that may have shaped human rights and trade policy and even diplomatic relations with a number of countries along the Pacific Rim, including the most sensitive one of all, the People's Republic of China...
...Huang went from Commerce to the Democratic National Committee as vice chairman for fundraising...
...That has always been the case and will be happening more and more as decisions in Washington shape the world economy...
...In the mid-8o's, Riady owned the bank jointly with Little Rock's Jackson Stephens...
...He has contributed $137,000 to the DNC...
...Last summer, reports New York Times columnist Bob Herbert, an Indonesian labor activist named Cicih Sukaesih came to Arlington, Virginia, hoping to address a Labor Department-sponsored forum on fashion-industry sweatshops...
...In the same year, Huang switched back to Lippo Bank California, where he stayed until taking a posting to the Commerce Department in 1994...
...Arkansas firms like Entergy and Wal-Mart made Asian deals with Lippo, often working through Little Rock lawyer C. Joseph Giroir, Jr., the former lead partner of the Rose Law Firm who helped hire Hillary Rodham Clinton in 1977...
Vol. 29 • December 1996 • No. 12
