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September
30, 2002, 9:00 a.m. By Allison R. Hayward |
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he ugly story
of New Jersey Senator Robert Torricelli continues to grow. The Torricelli/Chang
story has it all — laundered campaign contributions, perjury, the
destruction of documents, witness tampering, North Korea, illicit gifts,
and a cast of characters reminiscent of the 1996 DNC fundraising scandal
from which it emerged. The Senate Ethics Committee reprimanded Torricelli
in July for accepting gifts from supporter David Chang after the Justice
Department declined to prosecute. New evidence suggests that both the
Justice Department and the Senate Ethics Committee may have neglected
their responsibility.
Media lawsuits have now uncovered a letter from the U.S. Attorney's Office for the Southern District of New York with details about the antics of David Chang, Torricelli's high-flying supporter who was sentenced in 2000 for laundering $53,700 in illegal contributions to Torricelli's 1996 reelection campaign. The recently released letter (under seal for almost two years) was directed to his sentencing judge and described Chang's help with both the investigation of Senator Torricelli and the prosecution of retired State Department official C. Kenneth Quinones. In light of his help, prosecutors requested that the judge exercise leniency when sentencing Chang.
Chang, initially represented by an attorney with close ties to Torricelli, was indicted in March 2000 for conspiracy, obstruction, and witness tampering in connection with his activities supporting Torricelli. But before trial, with the aid of a new attorney, he offered to help the prosecution. According to Justice's letter, he provided what is described as "credible information" about Torricelli. Chang related that from 1995 through 1998 he provided tens of thousands of dollars in cash and gifts to Torricelli in exchange for the senator's help with Chang's business projects. Chang said that his relationship began when Torricelli wrote recommendations for Chang to other officials, then asked for $25,000 in cash from Chang for his campaign. Chang obliged, and from then through 1998 Chang said he gave Torricelli cash, antiques, jewelry, and electronics at Torricelli's request and while Torricelli's office was intervening on Chang's behalf with a variety of officials here and abroad. According to the letter, Chang was able to substantiate many claims with other witness and document evidence.
Chang similarly sought the good graces of C. Kenneth Quinones, a now-retired official who at one time had been the North Korean Desk Officer at the State Department. Chang sought help with business prospects in North Korea in 1995-96, specifically support for his company becoming project coordinator for the construction of light-water nuclear reactors, and obtaining a contract to recover the remains of POWs from the North Koreans. Chang also pursued the repayment of debts from North Korea and release of frozen assets there. Chang gave Quinones an Acura Legend, found a job for one daughter and paid $65,000 toward another's daughter Stanford tuition. Quinones, in contrast with Torricelli, pled guilty to violations of government conflict of interest laws in August 2001.
Chang could not have done all this without the help of others, and several Chang associates have also felt the long arm of the law. Berek Don, one of Chang's attorneys and a Republican-party leader, laundered contributions for Chang to Torricelli with the assistance of his law partner, Carmine Alampi. Cha-Kuek (Charles) Koo gave $20,000 from Chang to Torricelli via intermediaries.
Yet prosecutors declined to pursue Senator Torricelli, stating that Chang's evidence, while very useful, might not sway a jury once the jury knew of Chang's own record. Chang had lied during the investigation, attempted to tamper with a grand jury witness, and had made some seemingly exaggerated and unsubstantiated claims against Torricelli. Prosecutors concluded that jury would look askance at such a character, and even in such a colorful case decline to find Torricelli guilty "beyond a reasonable doubt." Although it is commonplace for felons to fall on the evidence of co-felons, the prosecutors here chose to refer the matter to the Senate.
The "reasonable doubt" standard does not apply to Senate ethics investigations. Nor need misconduct be a technical legal violation. The Senate committee may investigate improper conduct "which may reflect on the Senate," as well as violations of law, violations of the Senate Code of Official Conduct or Senate rules. If the committee finds "substantial cause" to believe that a violation has occurred, it may impose disciplinary action, which can include censure, expulsion, or removal from positions within the Senate.
The Senate ethics manual is clear on the acceptance of gifts by senators and staff.
A gift of cash or a cash equivalent (for example stocks or bonds) is not an acceptable gift . . . . Members and employees should never discriminate unfairly by the dispensing of special favors or privileges to anyone, whether for remuneration or not, and never accept favors or benefits for themselves or their families under circumstances which might be construed by reasonable persons as influencing the performance of [their] governmental duties. One should always be wary of accepting any gift, favor, or benefit that may not have been offered "but for" one's position in the Senate.
In addition to this general advice, Senate Rule 35 provides an exception for gifts under $50, but even here a member or staffer may not accept $100 or more in gifts from a single source in a year. The general rule still applies, however, so that even small gifts are not acceptable if received from individual with direct interest in business before the member.
According to public reports, the Ethics Committee reviewed the evidence, interviewed Torricelli, chose not to discuss the matter with Chang, and issued a stern letter in July 2002. Internal investigations of a member of the majority in the Senate can lack a certain . . . uh, rigor, but even this Ethics Committee found that Torricelli violated ethics rules by accepting a television and CD player from Chang (for which he apparently paid cost rather than fair-market value). Torricelli also improperly accepted a "loan" of bronze statues for office decorations, and allowed Chang to make gifts of earrings to Torricelli's sister, employee, and friend (one assumes all were known to Chang only through Torricelli) at a Christmas gathering in Torricelli's house. Finally, the Ethics Committee noted that Torricelli was wrong to "continu[e] a personal and official relationship with Mr. Chang under circumstances where you knew that he was attempting to ingratiate himself, in part through a pattern of attempts to provide you and those around you with gifts over a period of several years when you and your Senate office were taking official actions of benefit to Mr. Chang." For this, Torricelli received a "severe" letter of admonition from the committee.
The committee was presented with a rich factual array to evaluate. Though many details are still shrouded from public view, with what we now know it appears that Senator Torricelli solicited gifts from a constituent for himself and for family and friends, made official acts contingent on the receipt of gifts, accepted gifts, and directed gifts to others. Given Chang's close relationship with Torricelli (doing Christmas together?), it certainly reflects poorly on the Senate that Chang was also the center of a massive contribution-laundering scheme that directly benefited Torricelli's campaign. One might also conclude that Torricelli knew or should have known about Chang's fundraising machine — which would add another list of campaign finance violations (civil and potentially criminal) to the mix. In any case, Chang's efforts to purchase State Department assistance with North Korea through both Torricelli and a key department diplomat would alone make him sufficiently unsavory such that having him around should subject a senator to rebuke. It appears that enough other players in this drama have shared their stories with law enforcement that the Senate need not rely on the "unstable" Chang to sustain such charges.
But the Senate Ethics Committee says nothing about Torricelli's solicitations and is silent regarding Chang's conduct with Quinones. Astonishingly, rather than view Chang's campaign-finance violations and his initial efforts at obstruction as factors justifying discipline of Torricelli, the committee simply noted that as a convicted felon Chang lacked credibility. The best the committee could do was say that Chang was "attempting to ingratiate" himself as evidence that Torricelli should have known to stay away.
Ironically, many of the players in the story were apprehended through the Janet Reno Department of Justice's Campaign Finance Task Force. That task force, of course, began its work after allegations of improper DNC fundraising during the 1996 election surfaced in the press. The task force's work proceeded simultaneously with that of the Senate Committee on Governmental Affairs investigation. Senator Torricelli sat on that committee and participated in that investigation. Among other transgressions revealed by Torricelli's minority colleagues was Republican Congressman Jay Kim's illegal receipt of corporate contributions made by . . . David Chang. It's a small world after all.
Today Senator Torricelli has apparently weathered a criminal investigation and an ethics probe, even though numerous key individuals around him have not been so fortunate. One wonders whether Torricelli has covered all his bases. Press reports, and the recently release letter, suggest that substantial gifts came to Torricelli from Chang, and perhaps others. Gifts (of cash, cars, jewelry, or anything else) are income subject to tax unless eligible for exemption. The IRS has the capacity to investigate whether or not Torricelli and his family and friends received lavish gifts from others. Failure to report and pay taxes on gifts (or bribes) can be the basis for a tax-fraud charge and a charge of filing false tax returns. Unlike civil violations, these violations do not fall within the statute of limitations, and indictments on similar facts in other matters have appeared even a decade after the conduct. Will the taxman snuff the Torch, or will he continue, burning brightly?
— Allison Hayward is an attorney and writer in California and Washington D.C.