Note Ties GOP Group’s Loan to China Deals

WASHINGTON — Then-GOP Chairman Haley Barbour discussed helping a Hong Kong businessman with lucrative business deals in China if he would write off a $2-million loan to a Republican group, according to a lobbyist’s letter obtained Friday.

The letter, one of many documents turned over to Senate investigators looking into alleged campaign fund-raising abuses, says Hong Kong businessman Ambrous Young guaranteed the bank loan so Barbour’s group could repay Republican National Committee loans, thus giving the GOP money to use in 60 key House races in 1994. That could constitute a violation of federal election laws.

The letter to Barbour, dated Sept. 17, 1996, says Young expected something in return from Barbour if the loan was not going to be repaid.

“Forgiveness [of the loan] was always contingent upon Mr. Young getting something in return that would justify this kind of generous gift,” wrote Richard Richards, a lobbyist and business partner of Young.

Efforts by The Times to reach Barbour late Friday were unsuccessful. But the former GOP official told the Associated Press that the facts alleged in the letter are false.

Richards did not go into detail about the kinds of business deals Young was seeking, but he suggested that they needed to be equivalent to the amount of his loan.

Young, Barbour and Richards made plans to travel to China “for the purpose of seeing if we could facilitate some business in China that Mr. Young had in mind,” Richards wrote in the letter.

The letter may provide the most detailed picture yet of the relationship between the former GOP leader and an Asian businessman who offered substantial financial assistance to the GOP in its drive to capture a majority in the House. Richards lays out what he calls his understanding of the stages of the “whole transaction” between Young and Barbour’s GOP advocacy group, the National Policy Forum, in the letter.

The document is sure to fuel claims that Republican Party leaders sought foreign donations just as aggressively as the Democrats, whose activities have been the focus of most allegations in the donations controversy.

Barbour told the Associated Press that “neither the Youngs, Richards, nor anyone else ever asked me to help them ‘facilitate’ any business, or even told me about any business or deal in which they were involved.”

“I never tried to help them with any business in China, the U.S. or anywhere else,” he said.

Efforts to reach Richards for comment also were unsuccessful.

It was not clear Friday who provided the documents to the Senate Governmental Affairs Committee, which has subpoenaed Young and records of the National Policy Forum.

But Democrats were quick to use the newly disclosed documents to unleash a broadside at the congressional investigations, which have focused heavily on alleged Democratic abuses.

“There’s no question that this hurts [Republican] credibility as investigators of campaign finance,” Democratic National Committee spokesman Steve Langdon said in a prepared statement. “They ought to acknowledge what they have done, clean up their own mess and conduct truly bipartisan hearings in Congress. They have run out of excuses for why they won’t investigate themselves.”

The Richards letter was among 400 pages turned over to Senate investigators about Barbour’s National Policy Forum--which he founded in 1993 and chaired until early this year--as part of their investigation into foreign political donations and other campaign finance questions.

Investigators are trying to determine whether the National Policy Forum wrongly claimed tax-exempt status, whether it improperly assisted the Republican Party and whether the loan guaranteed by Young’s company amounted to an illegal foreign campaign donation.

GOP officials have insisted that the National Policy Forum was completely separate from the Republican National Committee, as is required by federal election law. The forum, if exempt from taxes, would be legally entitled to receive foreign contributions.

The Internal Revenue Service recently concluded that the GOP group’s activities were “too Republican” and did not deserve tax-exempt status, officials have said. The group is now defunct.

Young first surfaced in the campaign fund-raising investigation after earlier reports detailed the $2.2-million loan to Barbour’s group.

The Republican Party has since returned $122,000 in political donations from one of Young’s U.S. companies after determining that the money came from overseas sources.

It was the first time that the Republican Party was tied to significant amounts of prohibited foreign money--an issue that has plagued Democrats for months. The Democratic National Committee has said it is returning $3 million in tainted funds, most of it with foreign ties.

The documents revealed Friday may shed new light on Young’s understanding about his loan guarantee. Richards wrote that he was asked to help set up the loan so that the forum could repay a loan to the Republican Party in time to use the money “to help pick 60 targeted House seats” in the 1994 election.

The documents state that Barbour almost immediately sought to get the Hong Kong businessman to shoulder the cost of the loan.

Richards’ letter states that Barbour traveled to Hong Kong in 1994 to talk to Young about forgiving the debt. Barbour said Friday that he made no such trip then.

“You and I also discussed the possibility for forgiveness if Mr. Young could get some business opportunities that would justify forgiveness of such a large indebtedness,” Richards’ letter says.

“Conditions upon which his forgiveness were based have not come to pass,” Richards wrote. He urged Barbour to make arrangements to pay off the remainder so that Young would not be stuck with it.

The National Policy Forum ended up defaulting on $500,000 of the bank loan guaranteed by Young’s company, leaving Young to cover the rest.

Richards’ letter also suggests that Young had been aiding GOP causes for some time. “Mr. Young has been generous with the Republican Party for several years and would like to continue to do so. He does not want to have unpleasantness between you, as chairman, and/or the Republican National Committee, but he simply cannot justify writing off a couple million dollars at this stage,” it said.

Times staff writer Alan C. Miller contributed to this story.