PHANTOM WITNESS

John Huang had never before lost his cool in front of his colleagues. Yet here was the Democratic fund raiser agitating for three top executives from the world's biggest foreign investor in China to be invited to a White House coffee for prospective donors. Party officials saw no point in taking up space with foreigners not legally entitled to contribute. But "it was the only time Huang ever snapped," a former party official told TIME. And as a result, the three men from the Bangkok-based CP Group slipped into the White House in early June in 1996 to make their pitch to the President about China trade. Government investigators tell TIME that before and after the encounter, wire transfers totaling $625,000 were sent from the CP Group and an associate in Bangkok into the accounts of two Huang fund-raising associates or their families. Was it just a coincidence?

As Senate hearings open this week, Washington's campaign-finance scandal has come down to this: Republican Fred Thompson wants to know if Huang, the architect of Asian fund raising and the must-see Democrat for ethnic-Chinese moguls like the CP trio, was helping funnel foreign money into Democratic coffers and sending back U.S. government secrets in return. In tracing the money and telephone connections of Huang's fund-raising world, Thompson's investigators want to know: Was he a spy for China in the guise of a Democratic moneyman? Did he funnel money from Overseas Chinese-led companies by running it through a U.S. network of donors? Did he pass classified information about economic developments in Asia to his former employer, a burgeoning conglomerate with assets all over the continent? So far, Thompson's team has only partial answers, but it knows where the story begins.

The unholy liaison between foreign dollars and diplomacy began as a small, quiet meeting in the Oval Office. Standing before Bill Clinton on a September morning in 1995 were James Riady, the suave Chinese-Indonesian financier who was pushing to keep U.S. trade lines to China open; and Huang, networker par excellence, offering to raise money for the Democratic National Committee from Asian Americans he thought were good for $7 million.

The Clinton meeting had had its Republican counterpart just two weeks earlier, when G.O.P. chairman Haley Barbour pleaded his case aboard the yacht of Hong Kong tycoon Ambrous Tung Young. Barbour had offered Young a voice in shaping U.S.-China policy for the new think tank of the G.O.P.'s congressional majority. And by the way, Barbour added, the party needed a favor. Could Young forgive what remained of a $2.2 million loan that his overseas firm had guaranteed so the Republican Party could stop pouring money into the think tank and pour money into campaigns instead?