Tuesday, May 19, 1998; Page A20

A KEY missing piece in the inquiry into the financing of the 1996 elections has fallen into place. Congressional investigators had long suspected a "China plan" to buy influence and access and even specific concessions, but could locate no more than circumstantial evidence for it. This evidence, however, was more than a little suggestive of something rather different from the good government, "let's all pitch and help democracy and bolster progressive programs" motif that kept being defensively asserted as an explanation of what was going on. Now federal prosecutors have squeezed Johnny Chung, a California Chinese American fund-raiser who had pleaded guilty to tax and fraud charges. He reportedly has said he received funds from Chinese intelligence and passed on $100,000 to the Democratic Party.

There is more. Mr. Chung's Chinese connection is a well-placed military officer, an executive of a state-owned Chinese aerospace company that profited from a loosening of American standards for licensing exports of civilian communications technology in 1996. One of the American companies that did the exporting, Loral, is run by the Democrats' largest individual contributor, Bernard Schwartz. The double-barreled question at issue is whether the Chinese company influenced American policy and whether the American contributor, in return, gained from it.

Then there is the Pentagon complaint that a boost in American satellite exports resulted in the transfer of technology that conceivably could help China aim more accurately at American targets in space.

The White House denies wrongdoing. What is notable about the reaction elsewhere in Washington, however, is that some Democrats are as stirred by the tale of the Chinese connection as some of the more partisan Republicans. As a witness, Johnny Chung has his limitations. He is known as the accused "hustler" who visited the White House 49 times in the two years leading up to the elections and whose dubious contributions totaling $366,000 to the Democratic National Committee subsequently had to be returned. He is bargaining in his own interest. But the version of events in which he figures obviously needs to be examined up close.

The Justice Department has started down this road by opening up a "preliminary investigation"; a decision on whether to move to a special prosecutor is yet to come. Mr. Clinton says he supports a departmental investigation of alleged Chinese influence-seeking. The investigation should obviously also go to the knowledge of various administration and party officials as to what was going on and their possible knowing complicity in it. After 49 visits and donations of hundreds of thousands of dollars, the recipients of all this attention and money may surely be presumed to know something about who their benefactor is, what he is after -- and where he gets the money for his contributions. And if they didn't know, did they at least wonder? And if they wondered, did they not make any effort to find out? There's a lot to be explained.