Clinton Pick for Taiwan Post Resigns

WASHINGTON —  The Clinton administration’s appointee who has been heading the organization representing the U.S. government in Taiwan has resigned amid a Justice Department inquiry into allegations that he pressured Taiwan businessmen to contribute to President Clinton’s reelection campaign.

The State Department confirmed Tuesday that James C. Wood Jr., an Arkansas man who was named chairman of the American Institute in Taiwan in December 1995, stepped down on Jan. 17. The quasi-governmental institute has offices in suburban Virginia and Taipei.

Earlier last week, the Democratic National Committee received a subpoena from the Justice Department for any records in its files pertaining to Wood’s activities in Taiwan, sources said. The subpoena also sought documents concerning Democratic fund-raiser John Huang’s trip to Taiwan last May--in conjunction with one of Wood’s visits--to identify potential donors.

The State Department declined to comment on Wood’s resignation. Wood did not return calls.

The State Department’s inspector general opened an inquiry last summer into Wood’s visits to Taiwan after receiving complaints that he had urged businessmen there to contribute to Clinton’s campaign to express their appreciation for the president’s policy toward Taiwan. The inspector general’s office provided its evidence to the Justice Department in June.

The Justice Department has launched a broader inquiry into the alleged solicitation of foreign donors by the Democrats, particularly Huang. Foreign companies are barred from contributing to U.S. election campaigns, as are foreign citizens unless they are legal U.S. residents. The Democratic National Committee has returned $1.5 million in suspect contributions.

In another development, House Rules Committee Chairman Gerald B. Solomon (R-N.Y.) indicated that he plans to ask FBI Director Louis J. Freeh today to investigate whether Huang provided top-secret economic intelligence to his former employer, the Indonesia-based Lippo Group, when Huang served as a Commerce Department official before becoming a political fund-raiser.

In a letter to Freeh, Solomon stated that his request was prompted by “possible evidence” that Huang failed to follow a prohibition on engaging in activities to benefit his former employer.

Wood, an international trade lawyer, was named to the three-member American Institute board of directors by Secretary of State Warren Christopher in late 1995. The board appointed him chairman and managing director, a full-time post.

The institute, a private corporation, was established in 1979 to handle cultural and commercial relations with Taiwan after the United States recognized the Communist government in Beijing and broke off formal diplomatic relations with Taiwan.

Although Wood was once a foreign service officer, his appointment to the sensitive post antagonized China veterans in the U.S. foreign service because his predecessors generally had been chosen from within their ranks or had more extensive China experience.

U.S. officials said Wood visited Taiwan at least three times as head of the American Institute. The first occasion occurred last February, when Taiwan was moving toward its first presidential election and China was conducting large-scale missile tests nearby. Clinton responded to China’s nuclear tests by sending an aircraft carrier to the region.

Wood also went to Taiwan in late May for the inauguration of President Lee Teng-Hui. Accompanying him was Huang, a naturalized U.S. citizen who was raised in Taiwan and had returned there three times as a Commerce Department official.

Newsweek, which first reported the allegations concerning Wood, quoted unnamed sources as saying that “Wood told Taiwan businessmen that Clinton deserved to be ‘rewarded’ for granting a U.S. visitor’s visa to Taiwan President Lee Teng-Hui--then steered them to Huang.”

The Democratic Party said Huang went to Taiwan to prospect for campaign funds among U.S. citizens doing business in Taiwan and legal U.S. residents who were in Taiwan at the time. A spokeswoman said Huang raised no money there.

Solomon’s letter to Freeh focused on China rather than Taiwan and cited Huang’s interim top-secret security approval on Jan. 31, 1994--five months before he began work at the Commerce Department. Huang was still associated with the Lippo organization in Los Angeles at the time and received an $879,000 severance package when he left.

Huang was granted a clearance extension on Dec. 12, 1995, because his boss at the time had requested that Huang temporarily act as a consultant to the Commerce Department after he moved over to the Democratic fund-raising post. The request was denied but the security clearance remained effective until Dec. 9, 1996--a year after Huang’s departure. Commerce officials have said that this was an oversight.

Solomon noted that Commerce Secretary Mickey Kantor has said that Huang received “a weekly intelligence briefing centered on [China]. Any materials related to the briefing were under the control” of the CIA. Huang made numerous calls to LippoBank while at the Commerce Department. The Lippo organization has extensive financial interests in China.

Solomon said that these facts “represent a compelling need to protect the integrity of American economic and national security.”