Guilty Plea in Campaign Scheme

Wednesday, June 21st 2000, 12:00 am
By: News On 6

WASHINGTON (AP) — Thai businesswoman Pauline Kanchanalak agreed Wednesday to plead guilty to a scheme to illegally contribute more than $690,000 to Democrats in return for access to President Clinton and other officials, the Justice Department said.

In a statement filed in U.S. District Court, she admitted using accounts of her sister-in-law and mother-in-law to give more than $457,000 to the Democratic National Committee and five state Democratic committees in connection with a June 18, 1996, coffee at the White House.

Clinton attended the coffee, as did Kanchanalak, two executives of a Thai corporation known as the CP Group and John Huang, an administration and Democratic party official. Last year, Huang pleaded guilty to scheming to make campaign contributions with funds from the Indonesia-based Lippo Group.

Kanchanalak agreed to plead guilty to two counts, conspiracy to cause false statements about donors to be made to the Federal Election Commission and causing an illegal corporate contribution. The government agreed to drop a more extensive indictment against her.

As part of the same plea bargain, Kanchanalak's sister-in-law and business associate, Duangnet ``Georgie'' Kronenberg, agreed to plead guilty to one count of causing a $10,000 illegal corporate contribution to the Democratic National Committee in February 1996. The government agreed to drop its existing indictment against her and not to prosecute Kanchanalak's mother-in-law, Praitun Kanchanalak.

The government also agreed not to try to deport the two defendants as a result of their guilty pleas, if they abide by the agreements.

Pauline Kanchanalak and Kronenberg both agreed to cooperate with the continuing investigation of the Justice Department's campaign financing task force. They are two of the 25 people charged by the task force since it was set up four years ago by Attorney General Janet Reno.

Reno resisted pressure from Republicans on Capitol Hill, FBI Director Louis J. Freeh and former task force chief Charles LaBella to turn the investigation over to an independent counsel before the law authorizing such counsels expired.

Kanchanalak and Kronenberg were to formally enter their pleas Friday before U.S. District Judge Paul L. Friedman.

Kanchanalak could face up to six years in prison and a fine of $350,000.

The government and her lawyers advised the court that her conspiracy violation was aggravated by more than minimal planning, by her own role and by her willful attempt to obstruct justice during the investigation. It was mitigated in part by her acceptance of responsibility in pleading guilty.

Together, those elements translated to a recommended sentencing level of 6 months to a year in prison, Justice Department officials said.

Kronenberg faces a maximum penalty of one year in prison and a $100,000 fine. The government agreed not to seek any prison time for her.

Corporations are barred from political contributions. Also, foreigners are barred from making either ``hard'' money contributions intended for federal campaigns or ``soft'' money, which are not intended for a particular campaign.

The ban on foreign soft money contributions was affirmed by the U.S. Circuit Court of Appeals here last year when the Justice Department persuaded it to reinstate false statements charges that Friedman had thrown out against these two defendants.

As a Thai citizen, Kanchanalak is barred from political contributions in the United States. Her sister-in-law and mother-in-law are permanent resident aliens and thus can make political contributions.

In a statement filed with the district court Wednesday, Kanchanalak admitted that between Sept. 17, 1992, and Oct. 29, 1996, she moved more than $690,000 in funds belonging to her and the company she headed and co-owned, Ban Chang International (BCI), into accounts of her sister-in-law and mother-in-law.

She admitted this money was used to make campaign contributions, but the checks were drawn on those two accounts to conceal the real donors from the Federal Election Commission.

On May 26, 1994, Kanchanalak sat next to Laura D'Andrea Tyson, chairman of the president's Council of Economic Advisers, at a Democratic National Committee fund-raising lunch. On that day, Kanchanalak had her sister-in-law contribute $20,000 to the DNC and reimbursed her with BCI funds, she admitted in the court document.

The government said Kanchanalak's purpose in contributing was to gain favor with the DNC and get into political events with Clinton, administration officials and prominent business executives to impress clients and help develop business opportunities for herself and BCI.

Kanchanalak admitted illegal $1,000 campaign contributions in 1994 Sen. Edward M. Kennedy, D-Mass., and former Sen. John Glenn, D-Ohio, among a group of small donations to congressional candidates.