Task Force Opposes Retrial for Fund-Raiser

The Justice Department’s campaign finance task force has recommended against retrying Democratic fund-raiser Maria L. Hsia on federal tax fraud charges, a department source confirmed Wednesday.

A Los Angeles federal judge declared a mistrial in the case last week after the jury reported that it was hopelessly deadlocked, with most jurors favoring acquittal.

Judge Richard A. Paez gave government prosecutors until today to declare whether they intend to retry the San Marino immigration consultant on four counts of income tax fraud.

U.S. Atty. Gen. Janet Reno will be asked to sign off on the task force recommendation, the Justice Department source said.

Hsia’s attorney, Kenneth M. Barish of Beverly Hills, expressed satisfaction with the recommendation.

“I think they did the right thing,” he said. “This case should not have been prosecuted in the first place. It was totally without merit. Now, if they would only drop the other case against her.”

Hsia faces another trial in Washington on charges of funneling illegal contributions to the Clinton-Gore reelection campaign through monks and nuns at the Hsi Lai Buddhist Temple in Hacienda Heights.

She is also accused in that case of using the temple to launder contributions to Don Knabe’s 1996 race for Los Angeles County supervisor, to the 1994 reelection campaign of Sen. Edward M. Kennedy (D-Mass.) and to the 1996 reelection campaign of his son, Rep. Patrick J. Kennedy (D-R.I.).

The campaign funding and tax fraud prosecutions were brought by the Justice Department’s task force, which was established by Reno to look into allegations that illegal foreign and corporate donations made their way into the 1996 presidential campaign.

In the 19-day tax trial, Hsia was accused of failing to file personal returns for 1994, filing false personal returns for 1995 and 1996, and assisting in the filing of a false return for her business, Hsia & Associates.

Much of the prosecution’s case hinged on the testimony of Hsia’s former accountant and tax preparer, Richard Tsai. On the stand, however, he gave conflicting and sometimes confusing testimony.

Prosecutors were forced to impeach him with earlier testimony he had given to a grand jury.

Hsia’s lawyer contended that his client’s troubles with the IRS stemmed from Tsai’s mistakes, which Tsai allegedly tried to cover up by blaming Hsia.

Jurors queried after the mistrial said they discounted Tsai’s testimony as unreliable from the outset of their deliberations.

They were deadlocked 9 to 3 for acquittal on one count, 7 to 5 for acquittal on two other counts and voted 6 to 6 on a fourth.