WASHINGTON -- Indonesian billionaire James Riady, the shadowy Clinton-Gore fund-raiser who has stayed clear of the U.S. since the Chinagate scandal broke three-and-a-half years ago, may finally be under Justice Department investigation, investigators say.

Sources with knowledge of censored parts of recently released FBI and Justice reports say Riady is a target of the campaign-finance task force.

"We wouldn't confirm or deny it," Justice spokesman John Russell told WorldNetDaily.

James Riady

Russell declined to say if a warrant has been issued for Riady, reportedly in Jakarta, or if a special federal grand jury has been sworn in to hear such a case.

Riady runs the Beijing-tied Lippo Group conglomerate. He and his father, China-born Mochtar Riady, reportedly have some $8 billion invested in mainland China ventures, including ones with ties to Chinese army intelligence. Much of the illegal foreign money that poured into '96 Clinton-Gore coffers was laundered through conduits tied to Lippo and Beijing sources.

On March 24, before turning two long-sought, sensitive memos over to Congress, Justice says it redacted, or edited out, names and sections of the documents to protect ongoing investigations. The so-called "Freeh memo" runs 27 pages; the "LaBella memo," 94.

Many of the redacted parts refer to Pauline Kanchanalak, knowledgeable sources say, a major Democratic National Committee fund-raiser with ties to the White House and Beijing. She awaits trial on charges she defrauded the Federal Election Commission in the '96 presidential campaign.

But other redacted passages in both the Freeh and LaBella reports refer to either James Riady or both Riadys, sources say.

Attorney General Janet Reno, criticized for conducting a flaccid probe of White House allegations, came under more pressure early this year when Congress revealed that her task force prosecutors failed to ask President Clinton about his ties to Riady during interviews.

It's not clear what prosecutable offenses, if any, would result from an investigation of Riady.

But Riady's man in the U.S., John Huang, coughed up some clues in recently released transcripts of FBI interviews with him and in recent congressional testimony after being granted immunity. Huang last year pleaded guilty to one fund-raising felony.

He confessed to FBI agents that his former boss (who still bankrolled him during his probe) was the mastermind behind a plot to raise $1 million starting with the '92 Clinton-Gore campaign. The illegal scheme involved funneling foreign cash to Clinton-Gore through Lippo employees and other straw donors.

Huang, also born in China, says that Riady told Clinton of the plan during an August 1992 limousine ride after a California fund-raiser. Asked how Clinton reacted, Huang would only tell agents that Clinton never discouraged Riady.

Huang also revealed that Riady and he coordinated their fund-raising activities with another convicted Clinton-Gore fund-raiser, Yah Lin "Charlie" Trie.

They used Trie's Watergate apartment as a kind of staging ground for their shady operation. It was the first serious information gleaned that Huang and Riady conspired with Trie, another old friend of Clinton's from Arkansas.

Despite a plea deal that earned him no jail time and immunity from prosecution for espionage, Huang has refused to implicate Clinton or other White House, or DNC, officials in his criminal conspiracy.

After a late 1995 White House meeting with Riady, Clinton installed Huang, his "good friend" for some 20 years, as DNC vice chairman. (Huang's fund-raising for Vice President Al Gore goes back to Gore's Senate days, and may go back to his days as a congressman, during which time Huang was living in Tennessee and wining and dining Chinese officials on behalf of a bank there.)

"In mid-September [1995], Huang and the [Riadys] met with President Clinton and (top aide) Bruce Lindsey at the White House," the July 16, 1998, LaBella task force memo states. "It was during this meeting that Huang's desire to leave Commerce and to begin work for the DNC was expressed."

The memo adds, "In fact, it was [Riady] who underscored for the president that Huang's talents were being wasted at Commerce and should be utilized in some other way."

In 1995, Huang had been working in the Commerce Department, where he had regular access to classified CIA briefings (while there, he saw as many as 550 separate pieces of mostly raw intelligence). Huang paid several visits to the Chinese Embassy during his 1994-1995 Commerce tenure.

Both the FBI and the CIA suspect Mochtar Riady (who despite his Muslim name, is ethnic Chinese) and his son James Riady are Chinese agents. Huang has denied spying directly or indirectly for communist China.

"Huang is closely tied to the [Riadys] and the Lippo Group, which has substantial connections to the Chinese government," states the Nov. 24, 1997, memo from FBI Director Louis Freeh to Reno.

In recent years Riady has lain low, but not so low that he doesn't still stay in contact with his old pal Clinton.

In September, during a trip in which he met with Chinese President Jiang Zemin, Clinton also met with Riady in New Zealand. But they didn't discuss anything "sensitive," the White House promised.

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