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CLINTON FUND-RAISING SCANDAL MAY HURT TELECOM TRADE

WASHINGTON-The escalating Democratic fund-raising scandal has moved from the Commerce Department to the White House, with President Clinton last week saying “mistakes were made” in the face of congressional and FBI investigations.

“It costs so much money to pay for these campaigns that mistakes were made here by people who either did it deliberately or inadvertently,” said Clinton at last Wednesday’s press conference.

“It’s up to others to decide whether those mistakes were made deliberately or inadvertently,” he said. “It’s up to me to do what I can to clean up the system.”

Fund-raising questions that dominated the news briefing are likely to continue to dog the president and may interfere with his second term agenda.

Criticism of Democratic fund-raising began with claims that former Commerce secretary Ron Brown, killed with 34 others in a plane crash in Croatia last April, politicized trade missions by tying membership on delegations to campaign finance support. It intensified shortly before the presidential election last November as a result of large Asian-tied contributions that have since been returned.

The drumbeat of criticism is getting louder by the week with each misstatement admitted by the White House and new revelations about the Democratic money-making machine that bankrolled the Clinton-Gore ticket to victory last fall.

Richard Daley, Clinton’s nominee to head Commerce, has vowed to slash political jobs in the agency and suspend trade trips for 30 days while selection procedures for such trips are reviewed.

That’s the upshot for lawmakers voting on his confirmation. The downside is that the scandal could have a chilling effect on U.S. telecom trade efforts at a time when a global free trade telecom pact appears to be within reach.

Telecommunications executives, including some Clinton backers from the wireless sector, were included on trips to Russia, India, China and other countries where key infrastructure contracts worth many billions of dollars are at stake.

In addition to the issue of whether federal campaign finance laws were broken are questions of economic and national security raised by Rep. Gerald Solomon (R-N.Y.).

Solomon is pressing for answers on the activities of John Huang, a key figure in various probes, who served as a Commerce Department official under Brown before becoming a prolific fund-raiser in the Asian-American community on behalf of the Democratic National Committee.

The DNC has returned $1.5 million (some from the wireless industry) of the $2.5 million in questionable contributions that Huang helped generate. Another $27 million was raised from White House coffees attended by the president and large donors over the past two years, the Associated Press reported.

Clinton, while defending the coffees, insisted donors did not get favorable policy treatment in return for financial support.

Yet the Clinton administration continues to warmly embrace trade with China, a potentially huge telecommunications market that Huang’s former employer-the Lippo Group-has keen business interests in, despite reported Chinese arm sales to terrorist states and the president’s own admission that efforts to improve human rights there have fallen short.

The congressional probe of Democratic and GOP fund-raising practices is being headed by Fred Thomson (R-Tenn.), chairman of the Senate Governmental Affairs Committee.

In light of new revelations about Democratic fund-raising, Sen. John McCain (R-Ariz.) predicted Attorney General Janet Reno, who twice turned down requests by McCain for an independent counsel to investigate Democratic fund-raising, will change her mind.

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