-Caveat Lector-
[Resent, with its correct numbering as {3/3)]
FAQ: Lippo and the Riadys
by Les Freeman
Indonesia's Mochtar Riady and his son James, whose cascades
of money ensured victory for Clinton and Gore in 1992.
The CIA has confirmed that the Riadys have long been
connected to Chinese Intelligence.
The biggest contributer to the Clinton-Gore ticket in 1992
was Indonesian businessman James Riady and his wife, who gave
$450,000.00 to elect Bill Clinton.
During the final weeks of the campaign, the Riady family,
its associates, and executives at Riady companies gave an
additional $600,000.00 to the DNC and Democratic state parties.
(Source: Analysis by Lisa Myers and Bob Windrem of MSNBC,
December 18, 1997.)
The patriarch of the business empire is Mochtar Riady, a
frequent visitor to the United States. Of his 3 sons, James was a
permanent resident of the United States, Stephen was educated
here, and Andrew worked in California in the early 1980's. All,
however, have fled the United States. Any Riady employee with
detailed knowledge of the family's activities in the United
States has likewise disappeared, even James Riady's secretary has
vanished.
Only John Huang, the family's former U.S. operative, remains
in the United States- he has pleaded the 5th Amendment,
maintaining that telling what he knows might incriminate him.
(Sources: Senate Report 105-167, "Investigation of Illegal
or Improper Activities in Connection with 1996 Federal Election
Campaigns,"; Senate Governmental Affairs Committee, chaired by
Senator Fred Thompson (R-TN) [Henceforth Thompson Report "Volume
1, page 1122.") [House Report 105-829 Volume 2].
The Riady empire, centered on its Lippo Group, is, as one
financial analyst in Jakarta describes it, "a carefully balanced
house of cards."
Newsweek has noted, "Moving cash around the globe in tangled
webs of transactions has always been the Riady way," and the
Asian Wall Street Journal accuses the Riady's of "RAMPING" --
buying large numbers of shares in their own companies in order to
support prices.
(Sources: Washington Post, reprinted in the International
Herald Tribune, May 29, 1997 , Asian Wall Street Journal
March 10, 1997.)
The Riadys' corporate flagship is the Lippo Group. In
Indonesia, the company has its fingers in many pies, making
textiles and electronics, mining coal, selling insurance, and
building shopping centers, housing developments, and hospitals.
(Source: International Herald Tribune May 29, 1997.)
In 1977 Mochtar Riady tried to buy the National Bank of
Georgia. He failed, but one of the brokers in the deal was
Jackson Stephens of Little Rock, Arkansas, who tried to interest
a disappointed Riady in joining Stephens, Inc., one of America's
largest private investment banks outside of Wall Street-and one
with which the Riadys would have an extended relationship.
Mochtar Riady agreed, and his son James, then aged 20, arrived to
intern at Stephens, Inc.
Through Jackson Stephens, James Riady met a rising
politician, Arkansas Attorney General Bill Clinton.
Thus began a friendship that has lasted 20 years, and has
spread a web of intrigue, financial corruption, and foreign
influence into American government.
In early 1984 James Riady and Jackson Stephens became
co-owners of Arkansas's largest bank, the Worthen Bank. James
was installed as the bank's chief operating officer, and a whole
team of ethnic Chinese from Indonesia came to work in Little
Rock.
(Sources: New York Times October 11, 1996, Arkansas
Democrat-Gazette April 25, 1986, The American Spectator
September, 1995)
In the 1st year under Riady's/Stephens management, the bank
lost tens of millions of dollars in Arkansas State pension funds
through a risky out-of-state investment scheme. Legally, Worthen
could have passed the loss to the state. But that disaster would
have ended then Governor Clinton's political career by
demonstrating his professional incompetence. Instead, Jackson
Stephens wrote a personal check for $32,000,000.00 to bail out
the bank-and Clinton.
In the Spring of 1992 Clinton was facing a crucial primary
in New York, and was out of money. According to one ex-Worthen
executive, James Riady "persuaded" the bank to issue the Clinton
campaign $3.5 million worth of letters of credit. This was the
first of 2 interventions in the American political system that
the Riadys would make in 1992 to help elect the Clinton-Gore
ticket.
(Sources: IBID, Business Week November 4, 1996)
James Riady has met and often hired many of Bill Clinton's
closest Arkansas cronies. Joseph Grioir and Webster Hubbell, both
former law partners of Hillary Clinton, are or have been on the
Riady payroll, as have Clinton golfing buddy Mark Grobmyer and
ex-White House aide Mark Middleton. It was Clinton's golfing
partner Paul Berry who helped the young Arkansas governor obtain
an unsecured loan of $20,000 for the Whitewater development
project. After the election, Berry joined a Washington lobbying
firm, Global USA, that worked with the Riadys. Global USA sent
pictures of Berry with Clinton to its Asian clients. Attached was
a letter claiming that "Paul's long association with President
Clinton and many of his top staff will provide you with unique
and fresh insight into the workings of the Clinton
administration."
(Sources: Time July 21, 1997, Asian Wall Street Journal
October 22, 1996, Asian Wall Street Journal October 17, 1996, New
York Times February 17, 1998, IBID, Asian Wall Street Journal
October 10, 1996, New York Times February 14, 1997, [House Report
105-829 Volume 2].)
By the late 1980's James Riady was a permanent resident of
the United States and thus could make legal campaign
contributions. His debut was at an April 22, 1998, fund-raising
dinner at his Brentwood estate for the Democratic Senatorial
Campaign Committee. As the Los Angeles Times, "At every table,
like a centerpiece--only better--was a United States Senator
primed to welcome wealthy Asian donors, both citizens and
permanent residents, as valued participants in the Democratic
Party."
(Sources: Los Angeless Times December 23, 1996)
By August 1992 the Clinton-Gore ticket was desperately
raising money in order to be competitive in certain key states
for the fall election. As he had done just before the New York
Primary, Clinton turned to his chief moneyman, James Riady. In
the middle of August, Clinton and Riady took a limousine ride
together. Soon thereafter, a cascade of Riady money-nearly
$600,000-made its way to the DNC and to a number of Democratic
state parties where the election was considered a toss-up.
Undeniably Riady's funding played a key roll in the Clinton
election to the presidency: the Clinton-Gore ticket ultimately
won 5 out of the 6 state races where Riady money played a factor.
In Georgia, one of the states targeted for Riady funds, Clinton
and Gore edged out the Bush-Quayle ticket by a mere 13,000
votes out of a total 2.4 million cast. Clinton and Gore also
squeaked by in Ohio, always considered a "must-win" state for
Republicans; it was their closest of any large state. This was
the 2nd time James Riady would come to Clinton's rescue.
The Clinton-Gore innauguration in mid-January 1993 was
another opportunity for the Riady's to open their wallets.
James Riady and John Huang each gave $100,000 to cover the cost
of the innaugural parties. The Riadys brought a number of friends
from Indonesia to Washington for the swearing-in ceremony.
(Sources: MSNBC posting of June 8,1998. Election statistics
from the Almanac of American Politics 1998, by Michael Barone and
Grant Ujifusa (National Journal, 1997), Los Angeless Times
December 21, 1997, IBID, [House Report 105-829 Volume 2]
At the direction of Mochtar Riady, Joe Giroir--a Lippo
partner and Arkansas "Friend of Bill" (FOB)--bestowed a life
sized bust of Clinton upon the National Portrait Gallery. Giroir
has personally contributed $200,000 to the DNC since 1993,
something made easier by his $500,000-a-year compensation from
Lippo.
In return for such generosity, the Riadys and their friends
were given unparalleled access to the White House.
In Jakarta, James Riady likes to brag about where he was on
the afternoon of April 19, 1993. On that day 80 members of the
Branch Dividian religious cult were holed up in their compound
outside of Waco, texas, when it was shattered by a tank-led
assault. By the time the FBI and Treasury's Alcahol, Tobacco, and
Firearms agents had completed their work, 17 American children
had burned to death.
As might be expected, the White House was a busy place that
afternoon, and the president was preoccupied. Clinton was not too
distracted, however, to chat with his leading contributors--James
Riady, John Huang, and Mark Grobmyer--in his little study off the
Oval Office. Riady later told Indonesian diplomats that, during
their chat, a TV in the corner showed the Waco compound burning
over and over as CNN repeated its coverage. Clinton even took
time to show his visitors the White House Situation Room, then on
full alert. White House entry logs confirm that Riady and his
companions were in the presidential offices (West Wing) of the
White House that day. They too apparently also dropped in on
Robert Ruben, now Secretary of the Treasury, who was then a White
House economics official.
(Sources: New York Times February 14, 1997, Deposition of C.
Joseph Giroir, Jr., April 26, 1997, before the Thompson
Committee, at 17, 19 [House Report 105-829 Volume 2].
Mochtar Riady gave $50,000 so the Arkansas's March of Dimes
would name Mrs. Clinton "Arkansan of the Year". The Riadys
donated $30,000 to Mark Grobmeyer's nonprofit "Center for the
Study of the Presidency", Dallas Morning News May 12, 1993, This
account of April 19, 1993, at the White House was extracted from
a longer story by the Washington Post and reprinted in the
International Herald Tribune May 28, 1997., White House WAVES
records for John Huang, reprinted in the Thompson Report at 297
[House Report 105-829 Volume 2]. It was John Huang's 6th visit to
the White House that week.
The Beijing Connection:
During the congressional investigations of campaign
fund-raising, Senate Democratic staff a document in John Huang's
files. On Lippo stationery is a memo dated March 9, 1993, from
John Huang to James Riady, regarding "Mr. Chen Xitong from
China." Huang is attempting to coordinate a trip to Atlanta by
Mr. Chen. Huang assures Riady, "I have already stressed the
importance of this visitor to all of us."
(Sources: Thompson Report at 4911 [House Report 105-829
Volume 2].)
At the time it was written, Chen was a CCP Politiburo
member, ranking 8th in the hierarchy. He was also mayor of
Beijing, and Beijing was competing with Sydney, Australia, for
the right to host the year 2000 Summer Olympic Games.
Short of the late paramount leader Deng Xiaoping and
ex-Premier Li Peng, it would be hard to find a more notorious and
corrupt CCP official than Chen, or one with more blood on his
hands from the June 1989 Tiananmen Square massacre.
Chen signed the martial law decrees justifying the use of
tanks and flamethrowers against unarmed civilians. After the
streets had been cleared of blood, Chen gave the official verdict
on the massacre in a report to the Standing Committee of the
National Peoples Congress. He blamed the murder of thousands of
innocents on a conspiracy originated by "some political forces in
the West," so it would be extremely difficult for Huang to get a
U.S. Visa for Chen.
(Sources: George Black & Robin Munroe, "Black Hands of
Beijing" [Wiley,1993]. Munroe heads the Human Rights Watch Asia
office in Hong Kong and was in Beijing during the massacre. Li
was Premier at the time of the Tiananmen Square massacre. He
became the leader of China's rubber-stamp National Peoples
Congress in the spring of 1998. IBID at 256. For an account of
flamethrowers at Tiananmen, see Timothy Brook, "Quelling the
People: The Military Suppression of the Beijing Democracy
Movement" [Oxford, 1992] 40. Black and Munroe at 256.
In March 1993 a Riady subsidiary "signed a letter of intent
with the Beijing municipal government on the land-use rights for
2 parcels of land in Wangfujing, the commercial and shopping
center of the capital," in the words of the South China Morning
Post. The Riadys intended "to retain a majority stake in the
projects and build retail and office properties," including the
Lippo Tower, with 1.7 million square feet of rental space. The
overall Wangfujing Street project will involve about $6 billion.
Another major investor is Hong kong billionaire Li Ka-shing.
But there was a hitch in the Riadys' plans: American fast
food giant McDonalds. In the aftermath of the Tiananmen massacre,
a number of foreign firms pulled out of China. Chen was so
desperate to keep foreign investors in his city that he granted
McDonalds a 20 year lease on the best corner of Wangfujing
Street. Now the Riadys and Li wanted Chen to break McDonalds'
lease. McDonalds fought him for almost two and a half years, but
in the end Chen broke the lease. The Riadys' Wangfujing Street
projects are scheduled for completion in 1999, in time for the
50th anniversary of the founding of the PRC. Chen's "importance"
to the Riadys is now apparent. The Riadys were beholden to Chen
for buying off McDonalds and paving the way for the Wangfujing
Street deal.
(Sources: South China Morning Post, [Hong Kong]; Business
Post, April 4, 1993, IBID, AP, November 22, 1994, UPI, December
24, 1994, Dallas Morning News, December 25, 1996, New York Times,
March 1, 1998.)
In 1997 a senator asked the Central Intelligence Agency
[CIA] to comment on the relationship between the Riadys and
BeiJing officials. the CIA said that almost all of the Riadys'
joint ventures in China are "with local, regional, and central
governments in Chian." The CIA added, "Lippo has substantial
interests in China" - about $2 Billion U..S. dollars in the
Riadys' ancestral province of Fujian alone. After noting Lippo's
involvement in large-scale public works projects in China, the
CIA added these very important and carefully chosen words: "Lippo
has provided concessionary-rate loans to finance many of these
projects in key Communist Party members' home areas." While
China is not a democratic country, a politician, even a communist
politician, who can bring home the bacon to his constituents
with below-market loans for big public works projects would
probably feel some obligation to the leaders. This combination of
networking and exchange of obligations is called "guanxi" in
Chinese. It is an important part of the way business is conducted
in many parts of Asia.
(Sources: Thompson Report at page 4565 [House Report
105-829 Volume 2].)
With as much money as the Riadys have at risk in China and
their level of integration into government and Communist Party
circles, it is inevitable that they would have dealings with
Chinese intelligence. The Riadys' chief partners in China
[including Hong Kong]--China Resources and the China Travel
service--are government-owned companies that accommodate or serve
as an extension of Chinese military intelligence.
Regarding the Riadys' relationship with Chinese
intelligence, an investigating Senate committee learned the
following from the CIA:
"The Committee has learned from recently-acquired
information that James and Mochtar Riady have had a long-term
relationship with a Chinese intelligence agency. The
relationship is based on mutual benefeit, with the Riadys
receiving assistance in finding business opportunities in
exchange for large sums of money and other help. Although the
relationship appears based on business interests, the Committee
understands that the Chinese intelligence agency seeks to locate
and develop relationships with information collectors,
particularly with close association to the U..S. government."
(Sources: Thompson Report at page 2507 [House Report 105-829
Volume 2]. "Collectors" is intelligence community bureaucratese
for "spies.")
Because of campaign contributions to President Clinton and
Vice President Gore, as well as financial support to Clinton
friend Web Hubbell at a crucial moment, the Riadys were able to
place one of their representatives, John Huang, in a position to
collect vital American political and economic information. This
information was immensely valuable to themselves and to others,
including the security services of Communist China. On the day
Bill Clinton and Al Gore were inaugurated, we could say this
about the Riadys of Indonesia based on the documentation we have
presented to thiss point:
1.) They were knowing, participating agents of the CCP and its
intelligence services.
2.) They had talent-spotted Bill Clinton 15 years earlier, when
he was an obscure politician in Arkansas.
3.) They were instrumental in gaining the Democratic presidential
nomination for Clinton in 1992.
4.) Through illegal campaign contributions, they became the #1
contributors to the Clinton-Gore ticket in the 1992 national
election, and they targeted their funds at key states that were
ultimately vital to Clinton and Gore's election.
5.) Presumably, they were not bailing out Clinton and Gore simply
out of the goodness of their hearts -- they expected to be paid
off.
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