The first wave of protest against President Bush's nomination of John Bolton to be his ambassador to the United Nations centered, plausibly enough, on Bolton's international track record, and specifically on his long history of bellicose commentary about the world body.
But there's a domestic Bolton, too. While the international Bolton gives cause for concern, the real problem is the domestic Bolton, and Democrats and moderate Republicans on the Senate Foreign Relations Committee who have reservations about the nomination should be looking at the domestic Bolton's background, because it suggests not mere rhetorical bellicosity but possible sleaze.
To cut to the chase: Did Bolton play any role in helping to conceal a foreign campaign contribution channeled to the Republican National Committee that may have helped the RNC prevail in the 1994 congressional elections?
Here's the story. In the run-up to the 1994 elections, Haley Barbour formed an outfit called the National Policy Forum (NPF), a nonprofit policy and research institute. Barbour was the head of the RNC at the time, and he took the reins of the NPF as well.
As was widely reported at the time, the NPF was partially endowed via a loan Barbour solicited with the help of a Hong Kong businessman and Taiwanese citizen named Ambrous Tung Young. The value of the loan, from a lending institution to the NPF, was $2.1 million; Young put up the collateral in the form of certificates of deposit.
The NPF had owed the RNC $1.6 million; so, once the NPF had secured its loan, it paid back the RNC the $1.6 million it owed. This sounds all well and good -- except for the fact that the NPF repaid the loan in October 1994, which, handily enough, gave the Republican Party that much more money to spend on its congressional candidates in elections just a couple of weeks away. Republicans gained 54 seats in the House of Representatives that election, and while no one's arguing that they made those gains only because of this late cash infusion, it clearly couldn't have hurt. There were additional allegations that the NPF was engaging in activities that were more directly political than the group's charter would have allowed.
The story gets dirtier -- and brings us to what is, for current purposes, the punch line. By 1996, the NPF had defaulted on the loan. In April of that year, the NPF sought to extend the loan's maturity date and revise its terms. That having apparently failed, the NPF took a far more dramatic step in May, according to a June 8, 1997, article by Dan Morgan in The Washington Post. The NPF's then-new president authorized the holder of the note, Signet Bank, to start taking its payments directly out of the certificates of deposit put up by Young as collateral -- without Young's knowledge, by all accounts.
That NPF president? John Bolton.
Signet Bank called the loan ($1.3 million remaining at that point) in September 1996, according to Morgan's reporting. This left a teed-off Young holding the bag, and in early 1997, the GOP agreed to pay Young 50 cents on the dollar (a sure sign that Young was not a happy camper).
It all smelled bad enough that the Republican-controlled Senate, holding hearings in the summer of 1997 on the role of foreign money in the 1996 election (for the purpose of trying to embarrass the Clinton administration -- John Huang, Charlie Trie, et al.), had to devote at least a couple days' worth of hearings to letting Democrats pursue the NPF matter.
A key question the Democrats tried to push at the time was whether Barbour knew that the money that collateralized the loan had come from Hong Kong. Barbour denied knowing this. But one witness at the hearings, a GOP fundraiser named Frederick Volcansek, testified that he told Barbour at the time that the source of the money was Young's Hong Kong business. In addition, Barbour had met with Young -- in Hong Kong! Yet in the face of all this, Barbour told the committee that the idea that the money came from Hong Kong “never entered my mind.”
With committee testimony that was both combative and aw-shucks-y -- and with his party in charge of the probe -- Barbour made the problem go away. And speaking of going away: Democrats had been pursuing Bolton to get him to testify. But, wouldn't you know it, he reported an important business meeting in Europe the week he was scheduled to appear, and he canceled at the last minute.
One GOP operative tried to laugh off questions about the NPF at the time by saying that it “was staffed by policy wonks. Do you really think we would trust those guys to conduct secret political work?” I don't know about the mid-level staff. But I do know policy wonks. Haley Barbour was no policy wonk, and neither was John Bolton -- who, as a young lawyer in the 1970s, worked on the Buckley v. Valeo lawsuit trying to reverse the campaign-finance reforms of the early '70s.
What did Bolton know about the Young loan? Why did he call Signet Bank and instruct a loan officer to start taking its payments out of Young's collateral? How did Young feel about all this? Did the NPF do expressly political work?
Barbour used to like to compare the NPF to the Democratic Leadership Council, but the DLC never had a political party chairman in charge, and it sure never found a sneaky way to channel a large amount of money to the Democratic National Committee just weeks before an election.
Staffers on the Senate Foreign Relations Committee trying to prepare their bosses for Bolton's hearings might want to contact former staffers of Fred Thompson's old money-probe committee. They might have some interesting tales to tell.
Michael Tomasky is the Prospect's executive editor.
