Fong May Return $100,000 If Funds Are Linked to China

Concerned about his political future, an angry Republican state Treasurer Matt Fong is considering returning as much as $100,000 in questionable campaign contributions from an Indonesian entrepreneur and the man’s family-owned business following reports that the money may have originated in mainland China.

The contributions came from Ted Sioeng and Panda Estates Investment Inc., a Hollywood company headed by Sioeng’s daughter, Jessica Elnitiarta.

Fong, who is preparing for a possible run for the U.S. Senate next year, hopes to shake a growing national campaign contribution scandal that until now has largely affected Democrats.

“It’s deeply troubling,” Fong said Monday. He said he was sending Sioeng letters demanding assurances within 24 hours that the contributions did not come from the Chinese government or other foreign sources. “If he gives me a satisfactory response, then we’ll keep the dollars. If it’s an unsatisfactory response from him, then I’ll give it back.”

In letters sent by express mail, Fong campaign treasurer William R. Turner asked Sioeng to verify that he was a legal U.S. resident and that the contributions “were made with legal, [personal or] corporate funds and not those of any other person or entity.” The campaign committee also noted that it would “cooperate fully with any federal or state investigation.”

Campaign records indicate that Sioeng--under his traditional name, Sioeng San Wong--personally contributed $50,000 in two checks to Fong’s campaign committee in April 1995. In December of that year, Panda Estates Investment Inc. contributed another $50,000 to the committee. Combined, the contributions match his largest donations in the last two years.

Attempts to reach both Sioeng and Elnitiarta on Monday were unsuccessful.

Several sources have told The Times that Sioeng left the country several months ago.

The donations helped Fong erase the debt remaining after his successful run for the treasurer’s post in 1994 and helped him establish a substantial surplus.

Fong accompanied Sioeng to a mid-1995 meeting that the California Republican had arranged with House Speaker Newt Gingrich. The session was nothing more than a “photo op” lasting less than 10 minutes, said Christina Martin, Gingrich’s press secretary. “Sioeng was escorted in, introduced, a photo was snapped and that was the end of the meeting. . . . There was little or no dialogue.”

Fong, a member of a panel that advises Gingrich on domestic policy, said he also asked the speaker to write a letter endorsing a $200,000 badminton tournament, a charity event supported by Sioeng’s family. Both Fong and Gingrich wrote letters of support, Fong said.

Federal law prohibits contributions from “foreign nationals” to candidates for elected office at the federal, state and local levels. An exception is made for legal residents of the United States. The law also bars contributions made in the name of another.

Records show that Elnitiarta and Panda Estates Investment contributed $250,000 to the Democratic National Committee last year. However, Elnitiarta has contributed to GOP coffers as well, including $2,000 to the California Republican Party in 1993.

The generosity to the Democrats earned Sioeng a seat next to President Clinton at a Democratic fund-raiser last summer in Los Angeles.

However, the contributions are not part of the $3 million that the DNC is returning because of questions about the propriety of the donations. After an extensive internal audit, officials concluded that Elnitiarta’s contributions were “legal and appropriate,” said DNC spokeswoman Amy Weiss Tobe.

Earlier this week, Newsweek reported that federal investigators were trying to determine whether the money Fong received from Sioeng came from sources in mainland China and possibly the Chinese government.

In its account, the magazine reported that federal investigators have been tracing a trail of money from China through banks in the United States to the account of the Metropolitan Hotel in Hollywood, one of the Sioeng family’s holdings. The contributions to Fong were all made with checks drawn on accounts at the Alhambra-based Grand National Bank.

However, the magazine pointed out that the money may have no connection to the political contributions.

In addition to real estate investments, the Sioeng family also has a controlling interest in the International Daily News, a Southern California newspaper that circulates in the Chinese American community. The paper, once strongly pro-Taiwan, became pro-Beijing after the Sioeng family took control.

One of the family businesses, China America Tobacco Industries Inc., has distribution rights for Red Pagoda Mountain or Tower cigarettes, which are made in China.

Born an Asian Indian, Sioeng was adopted by an ethnically Chinese family and reared in Indonesia. His daughter, Jessica Elnitiarta, is a naturalized U.S. citizen.

She is reportedly close to former Democratic National Committee fund-raiser John Huang, a central figure in the campaign financing scandal. In one internal DNC document, she refers to Huang as “Uncle Huang.”

Fong has been the beneficiary of contributions from other figures who have been touched by the Democratic fund-raising controversy. A Times review of Fong’s campaign statements shows he has received at least $24,000 from sources implicated in the DNC scandal in addition to the money from Sioeng’s family and businesses.

In 1995, for example, records show that he received $4,000 from two officers of the Lippo Group, the business at the center of the fund-raising scandals.

According to Fong’s campaign filings, both donations were arranged by John Huang.

Huang is the former Lippo executive who became an official in the Clinton administration’s Commerce Department and in 1996 was a major fund-raiser for the DNC. The DNC has returned or plans to return $1.6 million of the money Huang raised.

Fong is regarded as a rising figure in Republican politics and has been exploring a run for U.S. Senate. To that end, he is scheduled to hold major fund-raisers in Los Angeles tonight and in San Francisco on Thursday. However, critics say the revelations could prove to be an embarrassment.

One of his potential GOP opponents is San Diego Mayor Susan Golding. George Gorton, Golding’s campaign manager, noted that Republicans in Congress are calling for a special prosecutor to investigate donations from Asians to Clinton’s reelection.

“It would be awkward to be saying Clinton knew or should have known when you have a Republican candidate for U.S. Senate in the same circumstance,” Gorton said.

But Fong disputes the assessment, saying, “I don’t think there’s going to be any fallout.” His own supporters, he said, “are more willing than ever to help.”

Gladstone reported from Washington, Morain and Jacobs from Sacramento. Also contributing were Alan Miller in Washington and David Rosenzweig in Los Angeles.