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FOREIGN INFLUENCES
Although the Clinton Administration repeatedly denied that the Riady family had any influence on their policy decisions, one must question why the Riadys apparently received everything they asked for, as well as lucrative financial returns, even if it was detrimental to the interests of the United States. In order to understand how the Riadys gained such access to the Clinton Administration, one must understand their mutual history. The following information is compiled or quoted directly from the related sources. Mochtar Riady (formerly ethnic Chinese Lee Mo Tie) is the head of Lippo Limited, a billion-dollar investment firm in Indonesia. Some of their vast holdings include coal mines, insurance, and construction developments. In 1977, Mochtar Riady met with Jackson T. Stephens of Stephens, Inc. to discuss purchasing a portion of the National Bank of Georgia. Riady wanted to purchase the portion owned by Bert Lance, the Budget Director to President Jimmy Carter.1, 2, 3 Although the deal never materialized, Stephens and Riady solidified their connection. James Riady, Mochtar’s son, moved to Little Rock. Via their presence in Little Rock, the Riadys developed a relationship with then Governor Bill Clinton and his wife, Hillary Clinton. The Riadys pursued a relationship with Bill Clinton because of his political status, and Hillary did legal work for them during her days at the Rose Law Firm.4 Riady’s first business venture in Arkansas was the Lippo Finance & Investment Inc., purchased with a SBA (Small Business Administration) loan. Because Riady was a foreign national, he could not chair the company; Riady hired Vernon Weaver (President Carter’s former SBA administrator) for the position. "Weaver listed then-governor Bill Clinton as a character reference in his application to the SBA. Weaver [later became] Clinton's U.S. representative to the European Union."5 In 1984, Lippo and Stephens joined forces to buy a 30 percent stake in Worthen Bank Corp. One of Worthen's stockholders during this period was lawyer Joseph Giroir, who was then managing partner at the Rose Law Firm. Also present at the firm were Hillary Clinton, Webster Hubbell, and the late Vincent Foster.6 "In the first year under Riady/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 million to bail out the bank – and Clinton."6a Close associates of the Riadys were also close associates of the Clintons. This would not be the first time their mutual associates were intermingled or sought assistance from each other.7 That same year, James Riady also purchased another small bank in California, which came to be known as Lippo Bank.8 "When Clinton traveled to Hong Kong in 1985, the Stephens and Riady families arranged a cruise of Hong Kong harbor, a dinner, a shopping trip and a cocktail reception."9 In 1986, the Worthen bank hit hard times. Bank examiners "criticized a number of insider loans to entities controlled by the Riadys and the Stephenses. The examiners found more than $40 million in loans or lines of credit to businesses in which the Riadys were either owners or investors."10 Due to the collapse of Worthen, Riady then focused his attention on the Lippo Bank in California. The bank received three "cease and desist" orders in 7 years.11 "In 1990, bank examiners requested a criminal investigation after discovering that a 21-year-old teller made more than 900 suspicious wire transfers totaling $7 million to accounts at the Hong Kong Chinese Bank, owned by Lippo and China Resources (a Chinese front company). According to an examiner's memo, the teller routinely wired amounts of just under $10,000, the threshold at which transfers must be reported. Almost all the transfers were booked under phony names and initialed by a supervisor."12 Despite engaging in dubious business practices and their obvious ties to foreign interests, the Riady family’s association with Clinton continued until the beginning of Clinton’s second term as President.13 The Riadys offered assistance, either directly or indirectly, to Clinton during his 1992 presidential race. "During a crucial crunch period, Lippo provided candidate Clinton with a $3,500,000 loan."14 James Riady directly contributed $175,000 to Clinton and the DNC (Democratic National Committee). The Riadys and their business associates have contributed more than $700,000 to the Democratic Party since 1991.15 Some of these funds became part of the $3,000,000 the DNC was forced to return because it came from "questionable sources."16 After Clinton’s election, the Riady family contributed to his inaugural gala and Mochtar Riady attended.17 The Riadys gained access to the White House on 20 separate occasions, three times for private meetings with the President.18 They arranged trips abroad for members of the Clinton Administration.19 They accompanied foreign dignitaries to the White House.20 They boasted to government officials and business associates in China and Indonesia that they had close connections with the President. Mochtar Riady sent letters to the President detailing his "views" on foreign policy initiatives.21 Some specific examples are:
"In April 1993, James Riady escorted the governor of Jakarta to the East Wing for a meeting."23 The White House cannot provide any details on that meeting.24 "In 1993, Riady and [John] Huang arranged a trip to Atlanta so a high-ranking Chinese Communist Party official involved in Beijing's bid to host the Olympics in 2000 could meet the team that put on the 1996 games."25 "In early 1993, James Riady arranged for Grobmyer, a Little Rock lawyer and longtime friend of Clinton, to spend 1 1/2 hours with [President] Suharto in Jakarta. An official with Indonesia's Foreign Ministry said Riady insisted that Grobmyer ‘had the ear of President Clinton.’"26 In September of 1994, "he also took Wardiman Djojonegoro, the Indonesian minister for education, to the Oval Office to hear Clinton give his radio address. About that time, Djojonegoro's ministry granted Lippo a license to operate an international school at one of its property developments."27 "The Riadys also promoted Hubbell at Suharto's presidential palace as someone ‘influential with Bill Clinton,’ said another Indonesian official."28 "After Hubbell resigned from the Justice Department amid allegations of fraud, James Riady arranged for him to tour Indonesia. Riady made sure that Hubbell, like Grobmyer, visited the former Portuguese colony of East Timor, where Indonesian security forces have been accused of widespread human rights abuses."29 In September of 1995, "Riady accompanied Hartarto Sastrosoenarto, Indonesia's coordinating minister [to the] White House for a lunch. Joining them was John Huang…"30 "The Riadys [were also] interested in the administration's decision to approve most favored nation status of China, particularly since the family [was] developing a $1 billion power plant in southern China with the Little Rock unit of Entergy Corp."31 "They also maintained a steady relationship with Clinton’s associates. James Riady said in early 1993 that he was working closely with Grobmyer, who accompanied Riady on the first three of some 20 visits to the White House."32 "Another contact was presidential aide Middleton, who cleared James Riady to the Executive Mansion a half-dozen times."33 Another contact was Giroir, who left the Rose Law Firm in the late 1980s. "Just a day after James Riady visited Clinton in the White House in April 1993, Giroir set up a company intended to create partnership ventures with Lippo. The following year, he was able to capitalize on the U.S. decision to renew China's most-favored-nation trading status. "34 "Since then, Giroir has publicly discussed his efforts to broker ventures between Lippo and Tyson Foods, which has been trying to increase its chicken exports to the Far East. Tyson and Wal-Mart, which already has a store in a Lippo-owned complex in Indonesia, have pressed for and won Clinton administration backing for a controversial new airport near their headquarters' in Northern Arkansas that they hope could become a cargo gateway to Asia."35 "With the help of White House advisor Mack McLarty, Tyson and Wal-Mart…got the Federal Aviation Administration to provide $21 million in initial funding for the project, whose price tag may ultimately run into the hundreds of millions. "36 "Giroir is also involved in a cable television venture with Lippo. In January 1994, he and Betty Tucker, wife of then Arkansas Governor Jim Guy Tucker, traveled to Jakarta with Giroir to study the possibility [of] investing in a cable franchise with Lippo. The Tuckers formerly owned a cable television franchise that for years turned handsome profits but that later came to haunt them. Jim Guy Tucker, who resigned his office after a conviction in a Whitewater-related fraud case in 1996, faces a second trial arising from his cable dealings. "37 "Tucker's former lawyer, John Haley, a co-defendant in the cable case, is divorced from Maria Haley, a Clinton appointee to the Export-Import Bank. Haley's longtime law partner, Mark Grobmeyer, attended an Oval Office meeting with James Riady and passed out business cards presenting himself as ‘White House liaison’ to Riady executives in Jakarta. "38 These are just some of the ties that bound Clinton and the Riadys together. Ultimately, what did Mochtar Riady want? In short, he hoped for normalized trade relations with Vietnam, enhanced trade relations with Indonesia, and enhanced trade relations with China. By exercising his influence and installing one of his own people, John Huang, in the Clinton Administration, he was able to obtain all three, and more.
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