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Former GOP Chief Challenges Barbour’s Account Point by Point

Point by point, a previous GOP leader contradicted former party chairman Haley Barbour’s contention that he didn’t seek foreign money to help the party take back Congress in 1994.

Former party chairman Richard Richards testified at the Senate’s fund-raising hearings Friday that Barbour told him a $2.1 million loan Richards helped negotiate was intended to finance GOP congressional campaigns.

Richards said Barbour told him the loan was “an urgent thing” because “he needed to withdraw RNC monies” previously lent to a GOP think tank.

“`He said that the purpose was to assist in the election of 60 potential new congressmen,” said Richards, who headed the party in the early 1980s.

 Photo
Mark Wilson/Reuters
Former Republican National Committee chairman Richard Richards

Senate Democrats pointed to what they called glaring inconsistencies between Barbour’s account of the loan transaction and the versions of several other witnesses.

“We have some very significant contradictions,” Carl Levin of Michigan said during a break in Richards’ testimony.

But Ed Gillespie, a spokesman for Barbour, said the former GOP chairman “never told Dick Richards that the loan guarantee was to help the RNC win 60 House seats.”

Besides disavowing the loan’s connection with campaign needs, Barbour testified Thursday that he didn’t know the money was from a Hong Kong business owned by Ambrous Tung Young. He said he thought it was from a U.S. subsidiary of the firm.

Like several other witnesses, Richards said he told Barbour before the loan was made in October 1994 that the collateral would come from Hong Kong. “I told him the money would be transferred from Young Brothers Hong Kong to Young Brothers (USA),” Richards said.

Richards’ testimony concluded three days of Senate hearings on Republican fund-raising abuses.

Next week, the Senate Governmental Affairs Committee is scheduled to conclude the summer phase of its hearings by focusing on Democratic fund-raiser Yah Lin “Charlie” Trie, who delivered more than $600,000 to President Clinton’s legal defense fund, money that was eventually returned.

Asked about Barbour’s testimony that the extra money from the loan was not needed by the cash-rich GOP, Richards said: “If we thought they were flush with money we probably would not have entered into the discussion.”

The GOP think tank, the National Policy Forum, paid $1.6 million to an RNC account used to help state party organizations. Once transferred to the state parties, money could be used for get-out-the-vote efforts and other campaign-related expenses.

Sen. Joseph Lieberman, D-Conn., said it was clear “money starting out in Hong Kong ended up in an American campaign.”

Richards said he advised Barbour in 1995 against asking Young to forgive the loan guarantee. “I said don’t do that, it would be offensive to Mr. Young and it was offensive to me.”

The request was made anyway, and Young refused it, telling Richards “he wanted to be helpful to the party but he couldn’t forgive the loan.”

After the loan went into default, Richards tried to collect Young’s forfeited collateral because Barbour had promised the party would make good on any loss.

Barbour told him, “I am not going to pay a soft money loan with hard money,” Richards said. “I said, `Mr. Chairman, I don’t care what you pay it with, we simply want you to pay the loan.”‘

“I was quite disappointed in that,” Richards said.

The RNC eventually agreed to pay $745,000 to cover less than half the forfeited collateral.

“If it wasn’t felt there was an obligation, they shouldn’t have paid back half of it,” said Sen. Fred Thompson, R-Tenn., the panel’s chairman.

RNC spokeswoman Mary Crawford the RNC had no plans to repay Young the additional $800,000. “If there is an obligation, that obligation clearly belongs with the NPF, not the RNC,” Crawford said.

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