- The Washington Times - Tuesday, June 13, 2000

FBI Director Louis J. Freeh was reluctant to give up information to the White House during national security briefings involving suspected illegal 1996 campaign donations by the Chinese government, fearful it might compromise an FBI investigation.

According to a Nov. 24, 1997, memo, Mr. Freeh told Attorney General Janet Reno that the FBI and the Justice Department had "conflicting duties" in keeping President Clinton informed on national security matters and, at the same time, keeping from the White House "certain national security information" on the FBI's campaign finance probe.

In the 27-page memo, released last week by the House Committee on Government Reform, Mr. Freeh said the FBI "faced this conflict several times during the course of the investigation" and suggested the appointment of an outside counsel to probe campaign abuses by foreign countries would help alleviate the problem.

"Although the appointment of an independent counsel certainly would not eliminate the difficulty in deciding which matters should be brought to the attention of the president, it would lessen the perception problem," he said.

Mr. Freeh urged the appointment of an outside prosecutor in the case, saying he was "convinced, now more than ever, that this entire matter should be referred to an independent counsel." Miss Reno later rejected the proposal.

White House spokesman James Kennedy declined comment on the memo.

The memo does not discuss any specific national security concerns, but clearly shows Mr. Freeh and several of his senior advisers were reluctant to give the White House information the FBI had developed during the campaign finance probe. The national security flap had been the subject of congressional concerns in 1997, although the Freeh memo didn't publicly surface until last week.

The FBI inquiry focused, in part, on efforts by the People's Republic of China "to gain foreign policy influence by illegally contributing foreign money to U.S. political campaigns and to the [Democratic National Committee] through domestic conduits." The memo said the FBI found "substantial evidence" that huge sums of money was routed to the DNC by foreign sources "as a result of the massive fund-raising effort coordinated by the DNC and the White House."

The Federal Election Campaign Act prohibits any person from soliciting, accepting or receiving from a foreign person any "contribution of money or other thing of value … in connection with an election to any political office."

"If the FBI couldn't share national security information with the White House, then something was obviously wrong," said Mark Corallo, spokesman for the House committee. "This is yet another glaring factor that should have compelled the attorney general to appoint an independent counsel."

The Freeh memo was sent at a time investigators already had focused on concerns that millions of dollars in illegal donations from foreign sources had found their way to the 1996 campaign.

FBI Assistant Director Robert M. Bryant had noted in a May 15, 1997, memo to FBI Deputy Director William Esposito that the White House had taken "direct control" of DNC fund-raising efforts and there were concerns that both "soft" and "hard" money donations had been diverted from foreign donors to the DNC.

Soft money is unlimited and goes toward issues rather than candidates, who receive more-regulated hard-money donations. Using soft money for direct campaign activities is against the law.

Charles G. LaBella, former head of the campaign finance task force, confirmed Mr. Freeh's concerns in a July 16, 1998, report to Miss Reno, saying there was reason to believe Mr. Clinton and Vice President Al Gore "knew or had reason to know that foreign funds were being funneled into the DNC and the re-election effort."

Mr. LaBella called Mr. Clinton and Mr. Gore key players in a scheme designed to "raise money by whatever means and from whomever would give it, without meaningful attention to the lawfulness of the contributions."

The FBI's concerns over national security briefings surfaced publicly in 1996, when the White House accused the bureau of improperly limiting its access to intelligence that China sought to influence U.S. elections with campaign donations. Almost immediately, the White House hinted that Mr. Freeh whose term expires in 2003 might be fired.

Mr. Clinton told reporters at the time he had no information that would call into question Mr. Freeh's ability to do the job but said he was concerned the FBI had not been upfront with him.

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