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Saturday, March 22, 1997 - Page updated at 12:00 AM

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Dnc Memo Refers To Boeing -- Hints At Link To China Trade

Seattle Times Washington Bureau

WASHINGTON - Democratic National Committee records reveal that an interest group pushing normal trade relations with China might have coordinated its efforts with Boeing and also briefed John Huang, the central figure in an expanding fund-raising scandal.

A seven-page memo found in Huang's files released by the DNC show Huang closely followed the corporate and political efforts to push for normalized relations with China.

The memo, obtained by The Seattle Times and first reported in the upcoming March 31 edition of BusinessWeek magazine, was written by Haipei Xue, a Chinese dissident who ran the now-defunct Council on U.S.-Chinese Affairs.

Addressed to China Working Group, the council's board members, and Boeing, Xue describes wide-ranging efforts to sway Congress and the public to continue normalization of trade relations with China.

A copy of the memo, dated Jan. 14, 1996, was found in Huang's file along with a cover memo to Huang saying, "What follows is an update on strategies and programs I drafted for discussion with our partners, like Boeing in this case, and with the Embassy."

The cover note does not say which embassy. But the memo does describe efforts to have the council's "China partners" pay for congressional trips to China and plans to orchestrate "newsworthy stories" such as U.S. visits by Chinese nationals, successful Chinese private entrepreneurs and Chinese lawyers groups.

Boeing spokesman Tim Neale said the Seattle-based aerospace giant did not coordinate lobbying efforts with the council, but acknowledges making a one-time $10,000 contribution to the group in August.

"We weren't working with them or coordinating any of our activities with their activities," said Boeing spokesman Chris Walz. "We had parallel goals. We showed support in the sense that both of our goals were the same."

Walz said he knows of no link between Boeing, Huang and the Chinese government.

A potential connection between Boeing and Huang would prove embarrassing for China and Boeing at a time when they seem ready to announce a new jetliner agreement.

Huang is a former executive of the Indonesian-based Lippo Bank Conglomerate and a former U.S. Commerce Department official. He left Commerce and joined the DNC, which assigned him the mission of expanding the Asian-American donor base.

The FBI is investigating whether the Chinese government illegally laundered money to help finance congressional campaigns.

The central figure of the FBI investigation is Huang who, along with his prodigious fund raising for President Clinton and the DNC, helped raise thousands of dollars for Washington Gov. Gary Locke.

Xue is a dissident who fled China after the 1989 Tiananmen Square massacre. An anti-communist, he nevertheless believed that only by opening China economically would democratic reform be possible, BusinessWeek reported.

Xue was interviewed by The Seattle Times last year for a story describing Boeing's efforts to push for normal trade relations, but he never revealed that his group received financial backing from Boeing.

The group's telephone has been disconnected. BusinessWeek talked to council spokesman Ya Li, who said the group shut down from lack of funds and never received money from the Chinese government.

Boeing is one of several big American exporters that last year led a national lobbying campaign to win most-favored-nation trade status for China, an unapologetic human-rights violator but potentially the single largest market for Boeing and all of U.S. business in the coming generation.

Information from Seattle Times staff reporter Stanley Holmes is included in this report.

Copyright (c) 1997 Seattle Times Company, All Rights Reserved.

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