-Caveat Lector-

http://www.washingtonpost.com/wp-dyn/articles/A49876-2001Jan11.html


Riady Will Admit Illegal Donations

Plea Deal Provides Fine, No Jail Term


By Susan Schmidt
Washington Post Staff Writer
Friday, January 12, 2001; Page A01


Indonesian banking magnate James Riady has agreed to plead guilty
to conspiring to illegally funnel foreign funds to the campaigns
of President Clinton and other U.S. politicians, federal
prosecutors said yesterday. Riady has agreed to pay a record $8.6
million fine for the election law violations, but will receive no
jail time under a deal with prosecutors.

Riady is a principal in the family-owned Lippo Group, a financial
services conglomerate whose campaign largess has been scrutinized
for three years by Congress and the Justice Department's campaign
finance task force. Documents filed by prosecutors yesterday in
Los Angeles lay out in detail how Riady and John Huang, a former
Lippo employee in the United States, moved hundreds of thousands
of dollars from Lippo-owned firms abroad into political campaigns
here. Riady is to appear in court in Los Angeles on Tuesday for
sentencing; Huang pleaded guilty to similar charges in 1999.

Riady has admitted he and Huang provided money to political
campaigns to influence American politicians on matters of
interest to Lippo, including gaining normal trade status for
China, open-trade policies with Indonesia, normalization of
relations with Vietnam and regulatory exemptions for LippoBank, a
Lippo subsidiary in Los Angeles.

The plea bargain with Riady comes just days before Clinton leaves
office and a new Republican administration takes over the Justice
Department. The deal is believed to be one of the last major
outstanding issues remaining for the department's campaign
finance task force, which brought the case.

"It was at the point when it was ready to go and a decision had
to be made," said a Justice Department official last night.

As part of the deal, Riady agreed to cooperate and has already
been questioned by investigators examining allegations of
possible Chinese espionage and whether $100,000 that Lippo paid
to Clinton friend Webster Hubbell was intended to buy his silence
in the Whitewater investigation. The office of independent
counsel, which has also investigated Hubbell, indicated that the
deal was in the best interest of its investigation and that the
information provided by Riady assisted its office, Justice
Department officials said.

The Riady sentencing agreement calls for two years' probation in
addition to the $8.6 million fine. He also will be required to
perform 400 hours of community service.

Justice Department officials said that the lack of an extradition
treaty with Indonesia, where Riady lives, made it impossible to
demand jail time, and that campaign finance violations are
generally misdemeanor charges. Under the plea arrangement, Riady
and LippoBank will plead guilty to felony conspiracy charges, and
all but $10,000 of the fine to be paid by Riady will be levied
against LippoBank.

"You can do the plea deal or Riady is never brought to justice,"
said Assistant U.S. Attorney Dan O'Brien in Los Angeles. O'Brien
has had numerous debriefing sessions with Riady in Jakarta and
Zurich, and Riady will have to continue to be available to
criminal and congressional investigators.

Riady's two children are U.S. citizens. Under the deal, he can
seek to reenter the United States in two years.

The documents filed by prosecutors note that Riady pledged $1
million in support to Clinton during his first presidential
campaign, in 1992. Under the scheme outlined by prosecutors,
Huang got his employees at LippoBank in Los Angeles to make
contributions, then he reimbursed them with funds Riady had sent
from Lippo entities abroad.

In addition to donations to Clinton's campaign, contributions
went to other, mostly Democratic candidates in California and
other parts of the country, as well as Democratic Party
committees.

Attorneys for Riady stressed that Riady has cooperated with the
Justice Department and that his cooperation is voluntary.

"Mr. Riady is a successful Asian businessman and community
leader. After being accused in the press of being a Chinese spy,
someone who gives hush money and a fugitive from justice, Mr.
Riady is very pleased that the Department of Justice has been
able to learn that none of these charges are true," said
Washington attorney Abbe D. Lowell in a statement yesterday. He
placed much of the blame on Huang, saying that Riady "regrets not
being more vigilant when his associates were supporting various
campaigns in the U.S."

© 2001 The Washington Post Company

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