Honolulu Star-Bulletin Local News
Lum’s windfall,
Dem donations
under scrutiny

Her company brought in $8 million
and she gave thousands to Democrats

By Ian Y. Lind

A "no money down" investment apparently yielded a windfall of $8 million or more in just a few months for an Oklahoma company controlled by Democratic contributor and fund-raiser Nora T. Lum.

Lum, a former island resident, maintains homes in Honolulu and Tulsa, and has been a frequent visitor.

Nora Lum:
An Oklahoma company she owns
apparently made $8 million
in a ‘no money down’ deal

Congressional Republicans now want to know whether Lum misused her close ties to the Clinton administration and the Democratic National Committee to make the unusually lucrative deal, said Dave Bossie, staff investigator for Rep. Dan Burton.

Investigators are also looking at links between the Oklahoma deal and the Asian Pacific Advisory Council, a 1992 campaign project of the DNC, headed by Lum and her husband, attorney Eugene K.H. "Gene" Lum.

One of those associated with APAC-Vote was John Huang, who has been under attack by Republicans in recent weeks for his role in allegedly soliciting foreign contributions.

Melinda Yee, then top adviser on Asian-American issues for Clinton's campaign, was the group's liaison with the DNC and reported directly to the late Secretary of Commerce Ron Brown, then DNC chairman.

Lum could not be reached for comment.

Joel Wohlgemuth, a Tulsa attorney representing Lum and the company, said Friday that Lum "is just not going to make any public statements regarding what may or may not be occurring." He cited orders entered by a Tulsa court that restrict current and former company officials or attorneys from publicly discussing the affairs of Dynamic Energy Resources Inc.

The deal involved the November 1993 purchase of the assets of Creek Systems, a natural gas-gathering system, from Gage Corp. Lum and her business partner, Oklahoma oil executive Stuart Price, formed Dynamic for the purpose.

Using profits generated by the deal, Lum, her family, and associates of the closely held Dynamic later contributed more than $120,000 to Democratic Party committees and candidates in 1994 and 1995, including at least $42,000 to Sen. Edward Kennedy, Federal Election Commission records show.

Wohlgemuth said during court proceedings in August 1995 that the company spent an additional $150,000 on Price's unsuccessful 1994 run for a seat in Congress, a charge Price has denied.

Corporate funds were also used for campaign-related travel and other campaign expenses, according to company records disclosed during court proceedings last year.

Federal law prohibits corporations from contributing to federal candidates or making expenditures for any federal election.

The campaign contributions ceased after Price was ousted from the company and a lawsuit challenging the Lums' use of corporate funds was filed by Price's wife, Linda Mitchell Price.

Lum and others associated with the company have made no contributions in 1996, according to FEC records.

Lum built other political ties. She hired John R. Tisdale, one of President and Hillary Clinton's attorneys in Little Rock, Ark., to negotiate final details of the deal, and drew in Brown's son, Michael, who was given a 5 percent share of the company, a seat on the board, and a lucrative lobbying contract.

Another Democratic contributor Lum met during the Clinton campaign, Richard Choi Bertsch, was also named to the board and given stock in the firm.

Choi Bertsch is president of Metrosound USA, a California based consumer electronics company based in the Los Angeles area.

Also named to the board and given stock was Melinda Yee's mother, Helen Yee.

The purchase was completed on Nov. 9, 1993, using proceeds from the simultaneous sale of a newly negotiated gas supply contract, according to court testimony by Price.

The quick flip of the gas contract allowed Dynamic to make the purchase and profit substantially after only a minimal initial investment.

Price described the series of simultaneous transactions:

Four months later, Dynamic sold the remainder of the gas sales contract for $11.25 million to Enogex, a unit of Oklahoma Gas & Electric, Price testified.

When the sale was completed in March 1994, Dynamic still owned the gas pipeline and had $12 million in the bank, Price said.

The complete distribution of profits has not been disclosed, but company records cited in court show Nora Lum received $5.25 million in April 1994, along with additional shareholder distributions and consultant fees over the next year.

Dynamic's directors and officers later made numerous campaign contributions to Democratic candidates and committees, often giving similar amounts at the same time to favored campaigns.

Dynamic also paid for airline tickets to Boston in the fall of 1994 for Melinda Yee, Nora and Gene Lum, and daughters Trisha and Nickie Lum, Price indicated in court testimony.

"They said that they were going under instructions of Commerce Secretary Brown to go help Ted Kennedy win his Senate seat," Price testified.

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