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Thursday, April 10, 2003

Shanghai Surprise

This is too rich. The FBI “handler” of Johnny Chung in the hysterical Chi-Com fundraising scandals in the late 90’s turns out to have been sleeping with a Chinese double agent – and well known Republican fundraiser – for many years.

If you have forgotten the sad and tawdry story of Johnny Chung, let me remind you what all the breast beating was about:

MARGARET WARNER: Last year, Senator Fred Thompson, Chairman of the Governmental Affairs Committee, opened his investigation of campaign fund-raising abuses...


...but the hearings ended last October without establishing a Chinese government connection to various illegal contributions made during the 1996 election season.

Then, last Friday, The New York Times reported that Justice Department investigators believe they have established such a link, based on testimony provided by California businessman Johnny Chung. Chung, who made hundreds of thousands of dollars in questionable contributions to the Democratic National Committee, began cooperating with the Justice Department after pleading guilty to campaign-related bank and tax fraud charges in March. Chung reportedly told investigators that a significant portion of his 1996 contributions came from China's People's Liberation Army by way of Liu Chao-Ying, a lieutenant colonel who also is a top executive of Beijing's state-owned aerospace company, China Aerospace. That same year, the Clinton administration was making it easier for American commercial satellites to be launched by Chinese rockets--a move that benefitted Liu's company. Such launchings had been tightly restricted in the past out of concern that they would give China access to technology that could be used for military purposes.

The Justice Department is also investigating whether the administration's decision was influenced by domestic campaign contributions from executives of two American aerospace companies that had been lobbying to get the restrictions eased--Loral Space Communications and Hughes Electronics. Loral Chairman Bernard Schwartz gave the Democrats more than $600,000 before the '96 elections, making him the party's largest single contributor that year. President Clinton insisted that contributions had not influenced the decision to let China launch American satellites.

Remember now? Clinton had supposedly knowingly taken money from the Chi-Coms and two aerospace companies and then, acting as the Communist agent we always knew he was, eased regulations allowing the sale of extremely sensitive satellite secrets to his comrades. It was, of course, never even slightly proven that anybody in the White House had the slightest idea that the money Chung donated came from Chinese sources, the money was returned immediately upon hearing that it may have been, and all the scandal really managed to do was nail some low hanging fruit for violations unrelated to the screaming headlines charging espionage and treason. The investigation of Loral and Hughes continued but it was determined that the easing of restrictions had nothing to do with the kind of sensitive information the companies were suspected of sharing with Beijing.

Fast forward to March 28th of this year as we entered Operation Neocon Wetdream:

While he led an influential Pentagon advisory board, Richard N. Perle advised a major American satellite maker, Loral Space and Communications, as it faced government accusations that it improperly transferred rocket technology to China, administration officials said today.Officials at the State Department said that the senior official considering how to resolve the rocket matter, Assistant Secretary Lincoln P. Bloomfield Jr., was contacted by Mr. Perle once or twice in the second half of 2001 on behalf of the company.

At the time, Mr. Bloomfield, who heads the State Department's bureau of political-military affairs, and other officials were investigating accusations that Loral turned over expertise that significantly improved the reliability of China's nuclear missiles...

"We have an office, our political-military office, led by Assistant Secretary Linc Bloomfield, who did receive queries from Mr. Perle," Secretary of State Colin L. Powell said in response to a question during an interview today. "And quite appropriate, since Richard was, I guess, authorized for Loral to ask. In conducting our regular business I know that Linc and members of Linc's staff did have conversations with Richard Perle. We would do that with anybody who is authorized to call and ask of such matters."

Mr. Perle said this afternoon that he was retained by Loral seven months before his appointment by Defense Secretary Donald H. Rumsfeld to head the Defense Policy Board and was given a one-time retainer at the outset of his work. "I was retained by Loral in January 2001 to assist the company in assessing its dispute with the government concerning transfers of technology to the Chinese, to recommend approaches to settling that dispute including new security arrangements to assure against any further technology leakage," he said. "At no time did I urge any government official to settle the case."

He said any conversations he may have had with Mr. Bloomfield or his staff "related to the licensing" of other Loral satellites for the Chinese and that he was "not compensated by the company in connection with that activity."


The government accused Loral of providing Chinese officials with confidential materials from an American panel that investigated the February 1996 crash of a Loral satellite, which was built for Intelsat, the international consortium, and was launched by a Chinese Long March rocket.

The inquiry into Loral and other companies resulted in restrictions that have prevented the industry from seeking new business with China.


… people involved in the case have said Mr. Perle was retained on the instructions of Mr. Schwartz, who came under criticism by some Republicans during the Clinton administration for being one of the largest political donors to Democrats.

Mr. Schwartz retained a prominent team to defend the company in the investigation. Among those who worked on the matter were Douglas J. Feith, who is now under secretary of defense for policy. Mr. Feith is also an old friend and former colleague of Mr. Perle. When Mr. Perle was an assistant defense secretary in the Reagan administration, Mr. Feith was his special counsel.

And now we find that one of the FBI agents who was heavily involved in the Chi-Com fundraising scandal was also heavily involved sexually with a Chinese double agent who also happened to be a well known Republican fundraiser. Meanwhile, the company that was portrayed as a treasonous Chi-Com front for Bill Clinton and his commie brethren hires a bunch of neocon heavyweights in the Defense Department to get it out of its mess.

Oh congressional committees, where art thou? Anybody? No treason? What about the “smell test?” As Senator Specter (R-Gasbag) said at the time, “… these matters may be coincidences, but they raise an unsavory inference and ought to be investigated.”