Trie’s Deadly Deals

2 March 2000. Thanks to Peter Leitner.

Insight Magazine, no date

Trie’s Deadly Deals

Clinton fund-raiser Charles Trie has admitted to the FBI that he conducted a business deal that gave Red China equipment capable of producing deadly biological weapons.

Clinton friend and fund-raiser Charles Trie was a conduit for illegal donations from Chinese military and intelligence operatives to the Democratic National Committee and the president’s campaign committees. But Insight has learned that Trie also was involved — and used Clinton connections — in facilitating a 1993 sale of dual-use medical technology to China that poses a significant national-security threat.

In the course of 17 secret Trie interviews with the FBI in 1999 the Clinton confidant revealed an elaborate and illegal scheme to funnel large sums into Clinton-Gore campaign coffers and the president’s legal-defense fund. He also confessed to orchestrating the sale of a 500-liter (130-gallon) medical fermentation device to a pharmaceutical plant in China suspected of manufacturing chemical and biological agents for military purposes.

Insight has obtained copies of the secret depositions given by Trie to the FBI’s Campaign Finance Task Force that, until recently, was thought to have begun shutting down operations after skirmishes with the Reno Justice Department concerning the scope and direction of the long-running investigation. In fact, based on the FBI’s 302 summaries of Trie’s lengthy depositions, the task force appears significantly to have expanded its operations and is zeroing in on key targets involved in suspected illegal campaign donations from overseas, most notably China and Indonesia.

Trie, who pleaded guilty to making illegal campaign operations and is cooperating with federal authorities, has revealed extensive details about the machinery of campaign-finance irregularities involving the Democratic National Committee, or DNC, and Clinton’s political operations. He lays bare the elaborate methods he and others used to collect and channel illegal contributions from Asian-Americans and overseas nationals.

It is the revelation about the estimated $1 million sale of dual-use medical technology to China, however, and the involvement of a respected U.S. government scientist in a company Trie used to facilitate the sale, that most deeply has shocked federal investigators and national-security officials contacted by Insight.

Peter Leitner, a senior Defense Department licensing analyst who specializes in export controls of dual-use technology, has reviewed Insight’s copies of the confidential FBI interviews with Trie. Leitner says the transfer of the highly sophisticated pharmaceutical-grade fermenting machine poses significant risks to U.S. security at home and abroad if used to make advanced germ-warfare products such as anthrax and botulism.

The evidence of the fermenting machine’s sale and transfer sometime in 1993 to the Changchun Biological Products Institute is alarming, according to Leitner, given that the Chinese facility has been flagged by some experts as a biological-weapons laboratory run by the People’s Liberation Army. Leitner tells Insight: “This whole affair has the classic earmarks of a Chinese military-intelligence operation.”

What the FBI has done with the information newly obtained from Trie is not clear. However, Insight has learned that Rep. Dan Burton, the Indiana Republican who is chairman of the House Government Reform Committee, is aware of the new development and has scheduled hearings on this and other revelations made to the FBI by Trie.

Scott Wheeler, an investigative correspondent with the TV show American Investigator, has just finished a related video documentary, Trading With the Enemy: How the Clinton Administration Armed China. He presents a Who’s Who of military and intelligence officials, including former CIA director James Woolsey, discussing the ongoing and persistent attempts by Beijing to obtain such dual-use technologies from producers in the United States.

Wheeler and Leitner, who appears in the documentary, were asked to comment on the FBI summary materials. Leitner tells Insight that Trie’s export of biotech materials to China illustrates “a major diversion of U.S. military and technological assets to biowarfare plants in China.” According to Wheeler: “This is a new basis for the congressional oversight committees to revisit the federal task-force investigation of campaign-finance violations in light of compelling evidence that the Reno Justice Department has failed to conduct a thorough investigation.”

Trie told the FBI he formed an international-trading business in 1991 that “brokered the export of biotech machinery and elevator equipment to China.” It was this company, Daihatsu International Trading Inc., that arranged the sale in mid-1992 of the 500-liter fermenting machine from Sulzer Biotech Systems in Woodbury, N.Y., which, only after Clinton took office in January 1993, shipped the equipment from its Swiss manufacturing plant to the Chinese facility. How such an export could have been cleared for China remains a mystery, albeit one about which Chairman Burton will no doubt inquire. For the moment, Insight’s calls for comment from Commerce Undersecretary William Reinsch and Commerce Deputy Director of Export Licenses Eileen Albanese went unreturned by press time.

Trie said he was paid “a commission of $20,000 or $30,000.” But when federal agents interviewed Sulzer officials about the exotic sale sometime last year, according to government sources, they appeared more interested in whether the sale was part of a quid pro quo to funnel illegal monies into the president’s campaign or to the DNC than whether it was useful to expanding Red China’s deadly arsenal of biological weapons.

Trie told the FBI that he didn’t see the fermenter sale as a big deal. What appears to have impressed him is that on trips to China he met with high-level intelligence, military and business officials, some of whom gave him hundreds of thousands of dollars that he used to make illegal donations.

According to Wheeler, Rene Losher, former executive director of Sulzer Biotech Systems, has advised government investigators that a Swiss engineer was sent to Changchun to help install the tank. The buyer was Zhang Jiaming, director of the Changchun Biological Products Institute. Leitner says the FBI also should have been concerned with the likely participation in the deal of Peter Fu, a toxicology expert at the U.S. Food and Drug Administration’s research facility on the grounds of the Pine Bluff military arsenal in Arkansas. The arsenal originally was established to produce and store biological weapons, Leitner says.

According to the FBI summaries, Trie said Fu and his wife, Violetta, were “silent partners” in the formation of Trie’s Daihatsu International Trading Inc. and invested thousands of dollars in start-up capital. According to government sources who have seen Trie’s full FBI interviews, the Fu’s gave Trie $40,000 in “start-up capital” for this joint venture.

In fact, Fu tells Insight in an exclusive interview that he was not a “partner” with Trie and did not invest money in Daihatsu, per se. But he admits that he and his wife lent the Tries $40,000 as a favor and that the loan was repaid. At the same time, Fu acknowledges that the registered mailing address for Daihatsu was Fu’s home in Little Rock, Ark. “At that time [December 1991], Charlie’s wife and my wife tried to open a company,” Fu tells Insight. Mrs. Fu quit the business after a few weeks, Fu says. “Violetta felt she was incapable of handling the business because of lack of experience and lack of language ability.” He says he is not aware of any business conducted by Daihatsu or United Biotech, another trading company registered by Trie during the 1992 presidential campaign season.

A summary of Trie’s depositions to the FBI reads, in part: “Trie acknowledged being a close friend of Dr. Peter Fu, a research biochemist who was chief of the toxicology branch of an FDA facility near Little Rock,” adding that “the Fus withdrew from the partnership in 1992 or 1993.” Trie also told the FBI that Zhang was present when Trie formed United Biotech and that Trie had introduced Fu to Zhang in Little Rock.

Fu tells Insight that he may have been introduced to Zhang in 1992 but that he couldn’t and didn’t help them in their business. “Charlie brought someone to me who wanted to do something for a vaccine for hepatitis. They thought I knew something about vaccines, but I do not. It’s not in my area of research,” Fu says.

The 500-liter fermentation tank transferred to the Changchun facility would be prohibited for sale by the Department of Defense’s Militarily Critical Technologies List because it allows the manufacture of large quantities of biological agents, such as botulism or anthrax bacteria, for military purposes, Leitner says. Several 500-liter tanks of this type were discovered in Iraq and seized as contraband by U.N. Special Commission inspectors in 1991. According to government sources, China has listed the Changchun facility on the international registry of facilities producing biological or chemical agents but claims its only use at this time is for the production of pharmaceuticals such as hepatitis vaccines.

Leitner calls Trie’s deposition regarding the fermentation tank and the involvement of Fu “a revelation” that should have been followed up but apparently wasn’t. “Here we have an FDA guy who is head of the toxicology branch of his lab, who gives Trie $40,000 and gets introduced to the manager of a bioweapons program in China. They gave direct assistance to a biological-weapons program, and the FBI did not follow up. It’s right there on page four of the FBI summary. You can’t get more blatant than that.”

       Asked about these matters, both the FBI and the Justice Department declined comment.

___________________________________________________

       Trie’s Deal-Making Caught on Videotape

Peter Leitner, a Defense Department expert on dual-use technologies, warns that Red China’s effort to obtain restricted U.S. equipment has been “patient, precise and extraordinarily successful.” He explains that U.S.-based companies frequently have been enlisted to lobby for export waivers to transfer single items of dual-use technology which, by themselves, appear to be innocuous but which, when accumulated and combined with other exports, support highly sophisticated military production. This not only saves the People’s Republic of China, or PRC, billions of dollars in research and development, it escalates the upgrading of PRC forces, says Leitner.

Leitner, who for years has been criticizing the Clinton-Gore relaxation of export controls, teamed with Scott Wheeler of TV’s American Investigator to produce a documentary video, Trading With the Enemy: How the Clinton Administration Armed China, which just has been released. It includes a segment showing President Clinton’s friend and fund-raiser Charlie Trie and other members of an Arkansas state trade delegation meeting with Chinese officials in October 1992, just before the presidential election.

The voice of a man in the room, said to belong to Arkansas businessman Carl Bird, tells the Chinese officials: “His [Clinton’s] policy for China could be influenced, certainly by people at this table, a lot more than George Bush’s.” Then Trie interrupts: “[Bill Clinton] wants to invest in China … so he knows.” Trie turns back to the Chinese officials, who speak to him in excited Mandarin, and then he translates: “He says they can set up Bill Clinton with China — it will be a pleasure.”

Trie, meanwhile, was doing other strategic business. Daihatsu International Trading Inc., which he says he founded with his alleged silent partner Peter Fu of the National Center for Toxicology Research at Pine Bluff, Ark., received an order for a medical fermenter that could be used to produce biological weapons, including anthrax. Did the Chinese officials tell Trie the precise specifications of the machine needed for their Changchun Biological Products Institute in October 1992? According to copies obtained by Insight of secret FBI interviews with Trie during 1999, that is unclear.

This much is certain from the deposition summaries: The Chinese were very interested not only in the dual-use medical device but also in obtaining Trie’s help to use Chinese and U.S. companies to provide cover for visas necessary to get into the United States.

Leitner tells Insight that the involvement of Peter Fu made sense because “Fu is a world-class expert in biological weapons. He would have been a tremendous consultant for getting just the right specifications, just the right machine.” In an interview with Insight, Fu denies having had a formal role in Daihatsu and says he merely loaned Trie a little money as a personal favor — $40,000 worth.

During the same time period that Trie was working his deals with China while on Arkansas trade missions, then-governor Bill Clinton was making speeches excoriating President Bush for “coddling the dictators” in Beijing and putting U.S. business interests ahead of human rights.

The video includes interviews with Rep. Curt Weldon, a Pennsylvania Republican who is chairman of the House Armed Services subcommittee on Military Research and Development; former CIA director James Woolsey, former ambassador to China James Lilley; former Clinton fund-raiser Johnny Chung; and arms-control expert Gary Milhollin — all of whom give damning portraits of an administration hell-bent on risking breaches of national security for the sake of trade with the PRC. As Milhollin says in one interview: “The motto of the Clinton administration has been: When in doubt, ship it out.”