GOP Argued for Foreign Donations

By JONATHAN D. SALANT, Associated Press Writer

WASHINGTON (AP) - Even as the Republican Party relentlessly criticized Democrats for taking big donations from foreigners during the 1996 election, its lawyers argued in government filings that such contributions should be considered legal, records show.

In a case that escaped much public attention, the GOP even endorsed arguments offered by a Clinton-appointed judge that Republican National Committee chairman Jim Nicholson publicly maligned as wrong-headed.

``Foreign national donations to party committee non-federal accounts are legally permissible,'' RNC lawyers argued in a legal brief they filed at the Federal Election Commission last year in a dispute over a loan from a foreign businessman.

The quiet reversal has left Democrats crying foul.

``What it looks like they're doing here is selective outrage at best and utter hypocrisy at worst,'' Democratic National Committee spokeswoman Jenny Backus said when told of the FEC filings.

Republican officials said lawyers were simply trying to make the best possible case from the available law and rulings, but did not believe the loan should have been treated as a foreign donation as regulators argued.

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``It has always been the policy of the RNC not to accept foreign national contributions,'' spokesman Mike Collins said.

The legal filing may complicate the efforts of likely GOP presidential nominee George W. Bush (news - web sites) to make the Democratic fund-raising scandal an issue in his battle with Vice President Al Gore (news - web sites).

The DNC returned millions of dollars in suspect donations after the 1996 elections amid allegations that the contributions came from foreign sources, prompting a Justice Department investigation that resulted in the convictions of several Democratic fund-raisers.

President Clinton and Gore have been charged with no wrongdoing, but the GOP has relentlessly tried to make the vice president's involvement in the controversy - including his visit to a Buddhist temple where illegal donations were made - an issue in the campaign.

``He must think we have amnesia,'' Bush said earlier this month in lampooning Gore's calls for campaign finance reform.

But the same scandal prompted revelations that Republicans, shortly before their historic 1994 election victory that gave them control of Congress, arranged a $2.1 million loan from a Hong Kong businessman. Former RNC chairman Haley Barbour has defended his role in arranging the loan.

The Federal Election Commission's chief lawyer recommended a full-scale investigation into whether Barbour knew the money came from foreign sources, but the six-member commission deadlocked along party lines.

Before the case was dropped, the RNC defended Barbour in a series of legal filings. The GOP's main argument was that the loan should not be considered a campaign contribution and therefore the ban on foreign donations was irrelevant.

But the party's lawyers also argued that if the loan was considered to be a contribution, then the foreign ban did not apply. The lawyers said the rule applied only to donations to candidates, known as hard money, and not to the unregulated contributions to political parties often referred to as soft money or non-federal donations.

That's the same argument Attorney General Janet Reno used in refusing to appoint an independent counsel to investigate the 1996 fund-raising practices, a decision often criticized by Republicans.

``All donations were deposited into DNC soft money accounts, which means that they do not fall under the scope of the law, which plainly prohibits only the solicitation of hard money,'' Reno wrote at the time.

The Republican lawyers also endorsed a ruling by U.S. District Judge Paul Friedman, who threw out several charges against Democratic fund-raisers Maria Hsia and Charlie Trie on the grounds that the ban on foreign donations applied only to direct contributions to candidates, not soft money.

``The District Court in Trie was correct,'' the GOP lawyers wrote. ``In light of the District Court decision, the commission should re-evaluate'' its position.

While endorsing the ruling in the court papers, RNC officials have lambasted it in public.

``Friedman is so biased against the prosecution that he originally tried to dismiss all charges against Maria Hsia,'' Nicholson recently declared.

The DNC has gone to court to force the FEC to continue its investigation of Barbour, and is reveling in the Republicans' conflicting positions.

``It's ironic for Nicholson and Bush to talk about integrity when they appear to be speaking out of both sides of their mouths,'' Backus said.

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