WASHINGTON — When Attorney General Janet Reno dropped her investigation
of former Energy Secretary Hazel O’Leary for allegedly taking a bribe, she
did so over the advice of her FBI chief, a long-secret memo reveals.
Johnny Chung, a ’96 Clinton-Gore campaign donor, charged in the summer of
1997 that O’Leary agreed to meet with communist Chinese oil officials after
he donated $25,000 to her favorite charity, Africare.
“It is clear that the donation was made under extraordinarily suspicious
circumstances that are worthy of additional investigation,” FBI Director
Louis Freeh said in a Nov. 24, 1997, memo to Reno.
The memo, sought by Congress for years, was released yesterday by a House
panel probing a possible Justice Department cover-up of the Chinagate
scandal.
On Oct. 17, 1995, Chung met with Democratic National Committee officials
who put him in touch with Corlis Moody, an O’Leary aide. Moody arranged the
money-for-meeting deal, Chung says, during a meeting in her Energy office in
Washington.
The next day, Moody faxed him a letter signed by O’Leary inviting the
Chinese officials to meet with her the next day. About 90 minutes later,
Moody sent an Energy employee to Chung’s Washington apartment to pick up the
$25,000 check, made out to Africare.
On Oct. 19, 1995, Chung and his Chinese delegation of 12 SINOPEC
officials got their meeting with O’Leary in a conference room in her Energy
office suite. It lasted about an hour.
That night, after a tour of the White House, they met President Clinton
at a dinner benefit for Africare.
“The meetings at the Department of Energy and Africare event show
substantial involvement by DNC officials, including Richard Sullivan and Don
Fowler,” Freeh
wrote in his 27-page memo. “Consequently, these events should be further
investigated by an independent counsel.”
His memo was written a week before Reno announced her decision not to
seek the appointment of an independent counsel in the case.
“I have determined that there are no reasonable grounds to believe that
further investigation of Mrs. O’Leary is warranted,” she said on Dec. 2,
1997.
Reno argued that there was no proof that O’Leary knew of the meeting
between her aide and Chung. Also, she said the letter to the Chinese
officials was signed by “autopen,” not hand, making it hard to prove
“O’Leary had any knowledge of these letters.”
But in arguing that, Chung says Reno ignored information he gave FBI
agents who interviewed him.
He says that Moody told him on Oct. 18, 1995, that O’Leary signed the
letter.
“I got her to sign it and we are going to fax it over to you,” Chung
recalled Moody saying.
Also, he says Moody wanted to set up the meeting with O’Leary after they
met in her office on Oct. 17. But Chung says she told him that O’Leary had
gone home for the night and that they’d have to set it up in the morning.
What’s more, Chung says O’Leary came over to his table at the Africare
benefit and thanked him for his $25,000 check.
O’Leary, who resigned in early 1997, has denied Chung’s charges of a quid
pro quo, saying the meeting with the Chinese party was within the normal
course of her official duties.
Chung, who pleaded guilty to violating campaign finance laws and
cooperated fully with the FBI, insists he bought political access to O’Leary
on behalf of his Chinese benefactors.
“I gave $25,000 and I got the meeting. That’s why they need an
independent counsel” to investigate O’Leary, he said in a phone interview
from his Los Angeles office.
