Edition: U.S. / Global

Inquiry on Campaign Finance Is Running Dry, Officials Say

Published: July 14, 1998

Twenty-one months after accusations of illegal fund-raising arose from President Clinton's re-election campaign, law-enforcement officials concede they have no big cases to show for their effort and express doubts that they will obtain evidence to warrant prosecution of senior White House or Democratic Party officials.

Officials say they are increasingly pessimistic that they will ever answer questions at the heart of the inquiry: whether there was a plot by the Chinese military behind contributions to the Democratic Party that may have been intended to help Beijing gain easier access to American space technology and whether any Democratic Party or White House officials knew of the Chinese effort. Thus far, investigators have been stymied in their efforts to obtain the cooperation of witnesses in China.

Certainly there are still people being investigated, and conceivably a witness with crucial evidence could decide to cooperate, breaking open the investigation. And it is even possible that an independent counsel could be named to investigate top officials. But the cases brought so far by the Justice Department's campaign finance unit have centered on relatively low-level fund-raisers charged with illegally disguising overseas contributions through straw donors.

The indictment of the Thai businesswoman Pauline Kanchanalak and her sister-in-law today brings to eight the number of people who have been charged, and officials expect more to be charged with similar crimes in the coming weeks.

But the officials said that despite hundreds of subpoenas and thousands of hours of grand jury testimony they had no evidence that White House officials, their aides or Democratic Party leaders broke the law, even though some investigators, from the inquiry's early days, have sought evidence that higher-ups knew or encouraged the acceptance of illegal contributions. Now, whether such cases will be brought depends on the willingness of the fund-raisers to plead guilty and testify against their superiors, the officials said.

The evidentiary value of that cooperation could prove only marginally useful. So far, only one defendant, the California businessman Johnny Chung, has cooperated with the authorities. Although Mr. Chung provided what was apparently a link between the Chinese military and the Democratic Party, the officials said, it remained uncertain whether his information would implicate any officials at the Democratic National Committee or the White House.

Not all Justice Department officials are prepared to concede that their leads are drying up.

''This task force is on a roll with four new charges in the last six days,'' said Bert Brandenburg, a department spokesman, referring to tax charges brought last week against the California fund-raiser Maria Hsia and fund-raising charges against Howard Glicken of Miami, as well as the indictments of Ms. Kanchanalak and her sister-in-law, Duangnet Georgie Kronenberg.

''White-collar cases take longer than any other types of cases,'' Mr. Brandenburg said. ''But through aggressive investigation and prosecution, we have brought charges in mere months that usually take years to bring. This continues to be the department's largest criminal investigation, with more than 120 task-force members, offices on two coasts and resources drawn from around the country. And we are not done yet.''

Nevertheless, Republicans pass scathing judgment on the inquiry and continue to demand the appointment of an independent prosecutor, saying the Justice Department, under Attorney General Janet Reno, will never be able to investigate credibly the fund-raising practices of the President's re-election campaign.

''I think the people running this thing are people of integrity,'' said Senator Fred Thompson, the Tennessee Republican who was chairman of the Senate hearings on campaign finance abuses. ''But they refuse to acknowledge the hopelessly conflicted situation they are in. If they continue to travel down this road and wind up where it looks like they are headed, it's going to look a lot like a cover-up.''

A telling measure of the low fortunes of the campaign finance inquiry was illustrated after its top prosecutor, Charles G. Labella, announced in May that he would resign to become the acting United States attorney in San Diego. In trying to fill Mr. Labella's job, Ms. Reno found few prosecutors willing to take on the challenge of leading the inquiry already under way.

Under different circumstances, such an assignment might be considered a high-profile, career-making plum. But at least two prominent Federal prosecutors refused the offer. ''It's a loser,'' one prosecutor said. ''And it's going nowhere.''

Ms. Reno picked David Vicinanzo, an assistant United States attorney from New Hampshire, to take command of an inquiry that critics insisted was never given the top priority or the prosecutorial mandate that it deserved.

''The investigation can only be described as a total disaster,'' said Michael J. Madigan, the former chief counsel to the Senate committee that investigated campaign finance abuses. He is now a partner at Akin, Gump, Strauss, Hauer & Feld, a Washington law firm.