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By early last year, however, the National Security Agency picked up intercepts of provocative communications among Chinese officials. They included discussions of a covert operation aimed at influencing the 1996 elections. Other intercepts indicated that front companies for the Chinese government might try to funnel cash. A few months later the NSA took its information to the FBI, which began a probe. Of the six U.S. lawmakers who emerged as major targets, four were from California, where the business community began courting the Chinese soon after Richard Nixon renewed ties in 1972. Democratic Senators Dianne Feinstein and Barbara Boxer are longtime supporters of China's MFN status. (Feinstein's husband has extensive business interests there.) Representative Nancy Pelosi, a Democrat, is a leading opponent. Representative Tom Campbell, a Republican, sits on the House International Relations Committee. Another target was New York Senator Daniel Patrick Moynihan, a Democrat critical of China's occupation of Tibet. (The sixth has still not been identified.)
When the agents came to alert the lawmakers, they didn't have many specifics to offer. "They just said, 'Be extra vigilant,'" says Campbell. "The intonation suggested that it might be something as stupid as a sack of cash. Like I might be invited to a dinner and told, 'There's some money for you in the other room.'"
One person who did not get the word was Bill Clinton. At a press conference last week he complained that he had not been informed about the warnings of Chinese influence delivered by FBI agents in June. "The President should know," he insisted. That led to a highly unusual public statement by the FBI contradicting the President and insisting that the agents had never demanded that the aides keep their own superiors in the dark. By midweek the issue appeared settled. Attorney General Janet Reno said it had all been a misunderstanding between the briefers and the briefed over just how closely the information was to be held.
And here the story of the China connection gets squiggly. Officials tell Time that NSA/FBI intelligence ultimately will not show that the Chinese government intended to organize payments directly to U.S. campaigns. They suspect the money would have come from businesses with operations in China, including subsidiaries in Taiwan or Hong Kong.
For now, the probes are examining several paths down which they believe Chinese money may have flowed. A prime focus is the Lippo Group, the Indonesia-based conglomerate with major development projects in six Chinese cities. Its most famous former employee is Huang, the Commerce Department official turned fund raiser for the D.N.C., who stayed in regular contact with Lippo no matter what his occupation. Also under scrutiny are the CP Group of Thailand, headed by Chearavanont and represented in Washington by former Democratic fund raiser Pauline Kanchanalak, and San Kin Yip Group of Macau, a business partner of fund-raiser Charlie Trie. Like Lippo, both companies are owned by ethnic Chinese and have ties to Beijing officials. Federal investigators are also looking into the business practices of Johnny Chung, the Chinese-American entrepreneur who gave the Democrats $366,000 during a period in which he helped raise about $1.5 million from foreign investors.