Bush’s Brother Linked to Firm in Panama Deal : Noriega: Prescott Bush is a partner in a venture with a Japanese firm accused of paying bribes to the ousted dictator.

WASHINGTON —  Prescott Bush, the President’s brother, is a partner in a business venture in China with a Japanese company accused in Senate testimony of paying $4 million in bribes to Gen. Manuel A. Noriega, the ousted Panamanian strongman.

The deal between Bush and Tokyo-based Aoki Corp. involves construction of an $18-million golf course and resort outside the Chinese port city of Shanghai. Bush introduced Aoki to the Chinese officials participating in the development, according to a businessman involved in the deal.

The Shanghai project is unrelated to Aoki’s dealings in Panama, and Prescott Bush is hardly the first presidential relative to engage in business ventures that could be affected by government policies.

But Prescott Bush’s Chinese deals--the one with Aoki is among three--come at a time when Congress is strenuously protesting the Bush Administration’s moves to repair relations strained by the brutal suppression of pro-democracy demonstrators in China.

Aoki’s dealings with Noriega add another element of controversy as the Administration tries to ensure the stability of a post-Noriega government in the wake of last week’s military invasion.

The allegations that Aoki paid off Noriega emerged in hearings last year by the Senate Foreign Relations Committee’s subcommittee on terrorism and narcotics.

Jose I. Blandon, once a close adviser to Noriega who turned against the general, testified that Aoki Corp. paid $4 million in bribes to Noriega to try to obtain contracts to build a hydroelectric project in Panama.

Aoki Corp. has invested about $350 million in Panama. Its holdings include the Marriott Hotel in Panama City and a resort on the island of Contadora. Aoki also owns the Westin Hotel chain in this country.

Blandon testified that Aoki’s chairman, John Hiroyoshi Aoki, visited Panama and arranged at least one trip by Noriega to Japan. Aoki was Panama’s honorary consul in the southwestern Kansai region in Japan, including the cities of Kyoto and Osaka.

Jack A. Blum, who served as special counsel to the Senate subcommittee, said Thursday that investigators were told Aoki also hired South Korean businessman Tongsun Park to intervene on the company’s behalf with Noriega.

Park, a leading figure in a congressional bribery scandal in the late ‘70s, did not testify before the subcommittee. However, Blum said that Park told investigators he represented “Japanese businessmen” in his dealings with Noriega. He declined to identify the firms.

As part of his effort, Park arranged meetings in Panama in August and November of 1987 between Noriega and retired Adm. Daniel J. Murphy, who was chief of staff to George Bush when he was vice president.

Murphy, now a private consultant, testified before the Senate that he represented private businessmen on his trips. He said he was briefed before the trips by officials of the CIA, State Department, Defense Department and the vice president’s office.

Aoki Corp. officials in New York and Tokyo did not return telephone calls this week. The company’s chairman denied paying the bribes in a statement to Japan’s Kyodo News Service last year. Aoki also said he had never met Park.

Prescott Bush did not return telephone calls this week to his office in New York and his home in Connecticut. It is unknown whether he was aware of the allegations about Aoki when he entered the Shanghai deal.

Blandon’s testimony about the alleged bribes came on April 4, 1988, but was not publicized widely in the United States. The agreement on the Shanghai development was signed on May 12, 1988, by representatives of Aoki, Prescott Bush Resources Ltd. and the Shanghai Sports Service Corp., according to a press release issued by the partners.

The project will offer tennis, swimming, water sports and fishing. But the main draw will be a championship 18-hole golf course designed by Robert Trent Jones Jr. of Palo Alto, who has designed 150 golf courses around the world. Most of the memberships in the golf club are expected to be sold to Japanese businessmen.

In an interview, Jones said he has known Prescott Bush for years through the U.S. Golf Assn. and that he introduced Bush to Aoki Corp. officials a few years ago. Jones said it was the President’s brother who later arranged the meetings between Aoki representatives and the Chinese officials.

“My understanding is that he (Prescott Bush) and Aoki and the Shanghai Sports committee are the partners,” Jones said.

A former U.S. diplomat in China who is familiar with Prescott Bush’s activities there said that Aoki Corp. actually put up the money for the project.

“The guy (Prescott Bush) really doesn’t have that much money,” said the U.S. diplomat. “This amounted to using his name to help bring the Japanese in. The Japanese realized that in Shanghai they encountered a great deal of hostility” because of Japan’s wartime occupation of the country.

Bush also is involved in a project to build housing near the Shanghai airport that could be rented or sold to foreigners doing business in China. U.S. officials said the venture was stalled when Prescott Bush ran into difficulties with his Chinese partner and in obtaining public access to the site.

Prescott Bush also is being paid $250,000 as a consultant to a company establishing a communications network in China. He was hired for the post shortly after his brother imposed sanctions blocking the sale of equipment with potential military uses to China.

Officials of the company, Asset Management, International Financing & Settlement Ltd., said earlier this month that the project would benefit indirectly if President Bush approved an exemption to permit the export of three communications satellites to China by Hughes Aircraft Co.

The President approved the export of the satellites last week, but he White House said that neither the President nor Prescott Bush was aware of any direct relationship between Asset Management’s activities and the satellites.