PRESIDENT Clinton has clashed publicly with the FBI over allegations that China tried to influence last year's congressional elections. The President is also having to deal with charges that Chinese money was made available to help his own re-election.
The Chinese government has reacted angrily to the allegations by calling in the deputy US ambassador in Beijing to protest against reports in the Washington Post on the affair. Calling the reports "malicious fabrications", a Chinese foreign ministry official warned that such reports could damage recently improved relations between China and the US.
The timing is particularly sensitive in that the US Vice-President, Mr Al Gore, is to visit Beijing later this month.
This is the latest twist in the election campaign fund-raising scandals which are reaching into the White House and may yet affect the nomination of the President's former national security adviser, Mr Tony Lake, to head the CIA.
Mr Lake's Senate hearing began yesterday amid calls for an explanation of why two members of his NSC staff, who were warned by the FBI last June about alleged Chinese efforts to target members of Congress, did not pass on the information.
President Clinton was placed in the embarrassing position at his press conference on Monday with President Mubarak of Egypt of having to admit that he knew nothing about the June FBI briefing until recent press reports aroused interest in the alleged Chinese interference.
In answer to questions he said: "Yes, I believe I should have known. No, I didn't know. If I had known, I would have asked the NSC and the chief-of-staff to look at the evidence and make whatever recommendations were appropriate. It would have provoked, at least to that extent a red flag on my part."
President Clinton cautioned that the matter was still being investigated as a "serious allegation". He said it would be a "foolish error" for any foreign power to try to sway the outcome of any election in the US.
Later the FBI took the unusual step of issuing a statement denying a White House claim that the NSC aides who were briefed last June on the Chinese involvement were told not to pass on this information. The FBI said its agents "placed no restriction whatsoever" on this information being passed up the chain of command.
But the beleaguered White House retorted that it considers the FBI statement "to be in error".
A number of politicians have now said that they were among the six members of Congress who were also warned by the FBI last June that China might try to win influence through campaign contributions. They include Senator Dianne Feinstein of California and Senator Patrick Moynihan of New York.
Another California Democrat Congresswoman Nancy Pelosi, has caused a stir by revealing that she was approached by the FBI as far back as late 1991 and warned that China "is going to attempt to get funds into campaigns in the United States".
Charges that foreign interests were trying to influence the outcome of last year's congressional and presidential elections first arose last October in connection with Mr John Huang, a former Department of Commerce official and later a Democratic party fund-raiser who was tapping the Asian community in the US for millions of dollars.
The party has since had to return $3 million of these donations because they originated outside the US or could not be checked out. Mr Huang, who was born in Taiwan and had previously worked for the wealthy Indonesian Lippo banking and property group, is now being investigated by congressional committees.