- The Washington Times - Wednesday, September 6, 2000

A top Democratic fund-raiser targeted by the Justice Department's campaign finance task force on possible criminal charges in the sale of missile-related expertise to China has donated $734,500 to Democrats for the 2000 campaign.
Bernard L. Schwartz, chairman and chief executive officer of Loral Space & Communications Ltd., was recommended in 1998 as the focus of an independent counsel investigation to determine if questionable technology transfers his firm made with the White House's assistance were related to the $1.5 million in donations he gave Democrats in 1996.
Federal Election Commission records show that between February 1999 and June 2000, Mr. Schwartz gave Democrats an average of about $40,000 a month almost exclusively in unrestricted, soft-money donations.
The soft-money donations went to the Democratic National Committee ($245,000), the Democratic Senatorial Campaign Committee ($235,000) and the Democratic Congressional Campaign Coordinating Committee ($177,500). Another $77,000 went to individual candidates, including $45,000 to the New York senatorial race of first lady Hillary Rodham Clinton.
In addition, Loral employees have given more than $61,000 to Democrats, records show.
The FEC records, which reflect contributions only through June 2000, show no donations by Mr. Schwartz to the Republican Party, which vigorously questioned Loral's role in the transfer of missile technology to the Chinese.
Last year, a House committee chaired by Rep. Christopher Cox, California Republican, said key missile-related expertise supplied by Loral to China had damaged U.S. national security and that the firm had assisted the Chinese government in improving the reliability of its long-range missiles 20 of which are now aimed at the United States.
Task force chief Charles G. LaBella, who later was removed from office, had questioned Mr. Schwartz's White House ties in a July 1998 memo to Attorney General Janet Reno. He wanted an outside counsel to investigate the Loral executive and also to examine President Clinton's relationship with Mr. Schwartz and the firm.
Miss Reno later rejected the recommendation.
Mr. Schwartz, the Democratic Party's largest single donor in the 1996 elections, has denied his contributions were meant to influence Mr. Clinton's policies on satellite exports. The White House also has denied any wrongdoing.
DNC spokeswoman Jenny Backus did not return calls to her office for comment.
Loral is a high-technology firm based in New York specializing in satellite manufacturing and satellite-based services. It manages and is the largest equity owner of both Globalstar and Space Systems/Loral, which build large, high-powered satellites for telecommunications and environmental applications.
In his July 1998 memo, Mr. LaBella described Mr. Clinton and Vice President Al Gore as key players in a 1996 fund-raising plan designed to "raise money by whatever means and from whomever would give it, without meaningful attention to the lawfulness of the contributions."
He said abuse was "rampant" and that the campaign was "so corrupted by bloated fundraising and questionable contributions that the system became a caricature of itself."
Mr. LaBella also described Mr. Gore as "an active participant in the core group fundraising efforts" and told a Senate committee in May that the Loral-White House connection was a legitimate topic for an independent counsel probe.
He said prosecutors also were concerned that if "someone had given contributions and as a result of the contributions had received some benefit," an inquiry should be aimed at "the person who gave the contribution" and "the person who received the contribution." He identified the proposed targets as Mr. Schwartz and Mr. Clinton.
In his memo, Mr. LaBella noted that former White House Deputy Chief of Staff Harold Ickes played a key role in 1996 as coordinator of the DNC's fund-raising efforts. He said Mr. Ickes urged Mr. Clinton in two memos to pressure officials at Loral to help raise $3 million in soft-money donations for the Democratic Party.
Those memos document efforts by Mr. Ickes, who left the administration in 1997, to put Mr. Clinton and Mr. Schwartz together to discuss the urgent need for political donations:
In September 1994, Mr. Ickes told Mr. Clinton that Mr. Schwartz could play a role in generating donations "in order to raise an additional $3,000,000 to permit the Democratic National Committee to produce and air generic TV/radio spots as soon as Congress adjourns." He encouraged Mr. Clinton to invite Mr. Schwartz to a White House breakfast to discuss the need "to raise $3,000,000 within the next two weeks."
In October 1994, Mr. Ickes advised Mr. Clinton that Mr. Schwartz was "prepared to do anything he can for the administration." Mr. Ickes called on the president to personally solicit the longtime Democratic Party loyalist for a donation.
The October 1994 memo came while Loral was looking for the White House to switch licensing authority for satellite exports, which were included on a State Department banned "munitions list," to the Commerce Department, which sought to sell U.S. goods. Mr. Clinton later authorized the switch by executive order.
In his 1998 memo, Mr. LaBella also noted that Mr. Gore received a series of memos from Mr. Ickes and attended weekly meetings concerning hard- and soft-money donations to the DNC's hard-money accounts.
He described Mr. Ickes, who now runs Mrs. Clinton's New York campaign, as a "Svengali, assuming power with the imprimatur of the president to authorize DNC and Clinton/Gore '96 expenditures."
Last year, the House Select Committee on U.S. National Security and Military/Commercial Concerns With the People's Republic of China singled out Loral for supplying missile-related expertise it said damaged national security.
The panel said the technology transfers allowed China to improve the reliability of its long-range missiles and that Loral had assisted China without obtaining the proper licenses required for the transfer of militarily useful technology.
Loral sought the transfers after investigating the cause of a 1996 explosion that destroyed a Chinese rocket shortly after liftoff. The vehicle carried a $200 million Loral satellite.
The firm, in a report, determined the crash was caused by a flaw in the rocket's flight-control system. Loral later shared the findings with the Chinese, who used them to make improvements in the guidance and control systems of China's rockets.

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