China Cloud Looms Over Clinton White House

Swapping high tech for campaign cash could be hottest scandal yet.

The allegations of US technology favors for China in exchange for campaign contributions could prove to be President Clinton's most damaging scandal-attack.

Charges relating to the president's business dealings in Arkansas and his behavior with a White House intern pale in comparison with the possibility of compromising US security interests, say political analysts.

"When it comes to national security, if you can establish a compromise, it can be tremendously damaging," says Robert Dallek, presidential scholar at Boston University. "The public doesn't stand for that."

China scholars are worried, too. They see anti-China sentiment being whipped up again just as the president is set to attend a summit in Beijing next month.

But all of these concerns turn on a central point: Did the president make damaging foreign-policy decisions as a result of receiving campaign contributions?

All of Washington, it seems, is now trying to find this out.

This week, House Speaker Newt Gingrich announced the formation of a bipartisan select committee to investigate the allegations. It is headed by Christopher Cox (R) of California, known for his opposition to Mr. Clinton's ever-friendlier ties with China. The committee is expected to be up and running by mid-June, around the time of the president's departure to Beijing. The Speaker has suggested that he postpone the trip, but the White House says it will not change its plans.

Senate majority leader Trent Lott of Mississippi joined in with the formation of an all-Republican task force.

This is in addition to related congressional investigations as well as an ongoing Justice Department investigation. Wednesday, senior Justice Department officials rejected an FBI recommendation that an independent counsel be appointed to this case.

Unlike other accusations the president has had to battle, the China issue alarms both Democrats and Republicans. In a series of nearly unanimous votes, the House on Wednesday reprimanded the president for failing to act "in the national interest" and passed an amendment to the defense-spending bill that would ban satellite exports to China. The effect is that US satellites could not be launched on Chinese rockets.

Allowing American satellites atop low-cost Chinese rockets is one of the issues being investigated. Clinton, like former President Bush, has invoked his right to waive a Tiananmen-inspired ban on satellite exports so that US manufacturers such as Hughes Electronics and Loral Space and Communications can launch commercial satellites into space from China.

After a Chinese rocket exploded in 1996, a Loral subsidiary provided China with a report on the failure without clearing it through US officials, as required. The Justice Department is investigating whether the report helped China enhance its missile technology.

In February, Clinton approved China's launch of a Loral subsidiary satellite, despite the fact that Loral was under investigation. Justice investigators are also looking at campaign contributions and how they figure into waiving of the ban related to US satellite exports.

Democratic Party fund-raiser Johnny Chung reportedly gave the party $100,000 in 1996 from Liu Chaoying, a senior executive at China Aerospace Corp. and daughter of the then-highest ranking Chinese Army officer. Foreign donations to US campaigns are illegal.

Justice officials also are concerned about the more than $600,000 in Democratic Party contributions from Loral chairman Bernard Schwartz.

Ken Lieberthal, a professor of political science at the University of Michigan, says there are too many unknowns to know how damaging this is to the president.

He describes the essential questions as: Was Ms. Liu acting on behalf of her father? If so, did others in the Chinese government know? Most importantly, did the Clinton administration ease up on satellite exports to China as a result of the contribution?

"If the answer to all these questions is 'yes,' then this is a major issue," says Mr. Lieberthal.

Minimally, Lieberthal adds, this issue is going to harden the anti-China ranks on Capitol Hill and make it more difficult for the president to further his trade-oriented policy with China.

One concern to Michel Oksenberg, China scholar at Stanford University, is that Congress starts "micromanaging" China policy before it knows all the facts.

This is true especially now, when the United States needs China to bring stability to south Asia, Mr. Oksenberg explains. In light of India's nuclear testing, "This is not a moment to deprive ourselves of strategic flexibility, particularly in trying to caution Pakistan from detonating a nuclear device. China has to be part of that equation."

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