Chung realized he needed to request a meeting with the Securities and Exchange Commission, but didn't know how. So he called a Kerry aide who had been "hitting him up for campaign cash," as one of Chung's friends recalled. Kerry's people had learned of Chung's largesse from DNC's Richard Sullivan. Sullivan had been the party's point man in dealing with Chung, who by that point had delivered $351,000 to the DNC and Democratic candidates.
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The Kerry campaign aide was only too happy to answer Chung's question, "Who would we call?" Luckily, Kerry was on the Senate Banking Committee, which has jurisdiction over the SEC.
So Chung arranged for a meeting in Kerry's office on Capitol Hill for his guests, including Ms. Liu, sometime in the last week of July -- he doesn’t have the date. It was a 10-minute meeting. Kerry agreed to fax a request to SEC asking that they meet with the group. Chung watched as Kerry's office faxed the letter. It worked.
Mr. Yao and Ms. Liu got their meeting at the SEC, who had two of its international finance officials meet with them and Chung promised to help Kerry in an unspecified way.
In a handwritten note written the next week, Kerry thanked Chung for being willing "to help with my campaign" and added, “it means a lot to have someone like you on my team”.
Kerry initially denied he'd met Chung before the fundraiser, then called the timing of the SEC meeting and the fundraiser "totally coincidental."
As time passes
Within weeks, things began to happen. Chung and Liu agreed to do business together, setting up a company called Marswell Investments. On August 9, Chung and Liu filed incorporation papers in California, listing Liu as president and Chung as registered agent. In the first week of August, Ms. Liu wired $300,000 to Chung's Hong Kong bank account. On August 15, Chung has told investigators he moved $80,000 from Hong Kong to his California Federal account in Los Angeles, transactions that show up on Chung bank records obtained by NBC News.
Chung, who was always a soft touch for the Democrats, quickly put Ms. Liu's money to work. Did Chung know at the time that the money he was giving to the Democrats came from the People's Liberation Army... as he later told investigators?
Three days later, after the money arrived at Cal Fed, Chung gave $20,000 to the DNC to buy tickets to Clinton's 50th birthday party at Radio City Music Hall in New York. Then, the next week, on August 28 and 29, Chung was in Chicago at McCormick Place for the Democratic National Convention, giving two more checks totaling $15,000. On the 29th, he gave $1,000 to the Loretta Sanchez congressional campaign. Also at the convention, Kerry asked Chung to host a fund-raiser in California, following up on the commitment Chung had made during the meeting in Kerry's office a month before.
On September 9, Chung hosted a Beverly Hills party for Kerry. The price of admission: $2,000 a person -- the maximum anyone can give to an individual Senate candidate. But Chung wanted to give more. So, as he admitted in his guilty plea earlier this year, Chung had four of his employees give $2,000 each and then reimbursed them -- illegal under the campaign finance laws. He later pled guilty to the illegal bundling. [There is no evidence Kerry knew of the illegality.]
On September 28, Chung gave another $10,000 to the Democratic Senate Campaign Committee at a Boston dinner honoring Kerry and President Clinton. The entertainment that night: Whoopi Goldberg, Don Henley, Carly Simon, Crosby Stills Nash & Young and Peter Paul & Mary. It was Kerry's campaign fund that solicited Chung's help, faxing him an invitation two weeks earlier.
Were these contributions part of the $300,000 Ms. Liu gave Chung the first week of August? It would appear to be, but there is no clear answer. Chung has told investigators that the total drawn from Ms. Liu's deposits came to only $35,000, but admits there is no way to tell, since all of Chung's money by that point was commingled with that of his new partner, Ms. Liu. There was money coming in from a variety of sources.
And what was the ultimate source of the money? Chung later told investigators and an open Congressional hearing that General Ji Shengde, the number two in Chinese military intelligence might have been the ultimate source, describing a meeting in the basement of a Hong Kong restaurant where Ji told him of a plan to funnel $300,000 to the Clinton campaign, explaining “we like your president”.
Kerry could not have known, until Chung pleaded guilty and began talking to investigators in March, 1998, that the money he needed so desperately back then was tainted -- perhaps even the product of arms-dealing. Now, however, he may be asked new questions as he runs for President.
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Robert Windrem is an investigative producer for NBC News, based in New York.
http://msnbc.msn.com/id/4264134/