A clue to why Bill Clinton and the Democratic Party received heavy contributions from Indonesia's billionaire Riady family: its successful campaign in 1993 to block the presidential appointment of an unfriendly banking regulator. Orchestrating the intrigue was the suddenly ubiquitous figure of John Huang, whispering into the president's ear inside the White House.
Huang in 1994 was named an assistant secretary of commerce and later moved on to the Democratic National Committee as a fund-raiser. But not before he received an $800,000-plus bonus from the Riadys. He earned that money in 1993 as the top American executive for the family's far-flung interests, influencing the new American president's choice to head the Federal Deposit Insurance Corp. (FDIC).
This is the answer to the perpetual question of "So what?" posed by Clinton advocates and defenders. Money flowing from Jakarta to Washington was not philanthropy.
In the spring of 1993, the top choice for the FDIC was William Bowen, head of the First Commercial Bank in Little Rock. His connections were superb. He was a former Arkansas chief of staff for Gov. Clinton and was strongly supported for the job by the state's two Democratic senators, Dale Bumpers and David Pryor.
But Bowen also had powerful enemies in Arkansas, headed by billionaire investment banker Jack Stephens. The Worthem Bank in Arkansas was then controlled by the Stephens interests. In the words of a 1993 memo by a banking industry official, Bowen's First Commercial had "eaten Worthem's lunch" and relations between the two banks were "terrible." What's more, unpublished documents show Bowen gave federal regulators derogatory information about both Stephens and the Riadys, who previously had an interest in the Worthem Bank.
Suddenly, a new candidate for FDIC emerged: another Arkansas banker named William Brandon, then-president of the American Bankers Association. When he assumed the ABA presidency, Brandon had named to the association's board Worthem CEO Curt Bradbury, who immediately began campaigning against Bowen.
Notes taken that spring at a breakfast meeting of the Democratic Senatorial Campaign Committee Business Roundtable recorded Sen. Pryor "as speculating that the Brandon play could be screwing up the Bowen candidacy." The writer of that memo noted that he had "talked to Pryor sort of between the tables" and seated nearby was none other than John Huang.
"Did Huang overhear the conversation?" the note taker asked. "Possible." When "Pryor got up to leave" the breakfast early, "Huang also got up and collared Pryor at the door." In response to my inquiry, the senator had no recollection of that 1993 conversation but said: "I cannot imagine John Huang talking about the FDIC."
Others could imagine that and in fact saw it happen. When bankers in 1993 were invited to the White House to meet Clinton on Feb. 11 and July 15, Huang was very much in evidence both times, talking about the FDIC post and lobbying against Bowen.
At the July meeting, Huang was introducing the Worthem Bank's Bradbury around. Huang then entered the receiving line and got his little conversation with Clinton (who later described Huang as "my good friend"). Did he mention the FDIC post? Only the president and Huang know.
Shortly thereafter, a banking lobbyist's handwritten memo quoted Sen. Bumpers as saying "he has spoken twice with Clinton on Bill Bowen's behalf, and 'it ain't going to happen.' Jack Stephens in Little Rock put Brandon's name in to keep Bowen from getting the job. . . . He added that Clinton will not get in a fight between Stephens and Bowen." Bumpers told me he had no recollection of the conversation.
Bowen was indeed dead, and Clinton picked a friend named Ricki Tigert instead. "The Worthem Bank had enough power to prevent the appointment of any FDIC chairman who knew the ins and outs about Worthem and didn't like Worthem," an industry source told me. Nevertheless, the FDIC was still hounding the Riady-controlled Lippo Bank in 1994.
Documents released this week in response to a New York Times freedom-of-information request indicated that Huang in his Commerce Department job communicated with FDIC regulators. No question that John Huang delivers, and that's why interest in his operations will persist beyond Election Day.