Ex-Democratic Fund-Raiser Seeks to Recoup Legal Fees

Former Democratic fund-raiser Maria Hsia asked a federal judge Monday to order the Justice Department to pick up the tab for her legal defense against federal tax fraud charges.

The case, tried earlier this year in Los Angeles federal court, ended in a mistrial when the jury deadlocked with most panelists favoring acquittal. Prosecutors later announced that they would not retry the case.

Although those charges were dropped, Hsia is awaiting trial in federal court in Washington, D.C., 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.

Hsia based her request Monday on a 1997 law, authored by Rep. Henry Hyde (R-Ill.), that allows defendants who prevail in federal criminal cases to recover their legal costs if they can show that the prosecution was “vexatious, frivolous or in bad faith.”

During Hsia’s tax fraud trial, the Justice Department was forced to apologize for a prosecutor’s memo that referred to Hsia and her Washington-based lawyer, Nancy Luque, as “lesbian lovers.”

Appearing before U.S. District Judge Richard A. Paez on Monday, Luque said the memo by Justice Department lawyer Gregory Tortelli was just one example of the government’s bad faith in bringing the tax case against Hsia.

She further argued that the Justice Department decided to prosecute Hsia on the tax charges only after she refused to implicate Vice President Al Gore and fellow Democratic fund-raiser John Huang in campaign finance irregularities.

Luque acknowledged, however, that she had nothing in writing to support her claim that the tax case was brought as an act of reprisal.

But she said all the circumstantial evidence pointed to that conclusion, including the fact that Hsia’s tax problems with the IRS were already being handled as a civil matter.

Luque also accused Tortelli of altering an FBI agent’s witness interview memorandum to help incriminate Hsia. Joseph N. Laplante, a member of the Justice Department’s campaign finance task force, argued that Hsia’s claims of government harassment and bad faith were groundless.

He noted that Paez himself had twice rejected defense motions to dismiss the case on grounds of insufficient evidence.

As for Tortelli’s offensive memo, Laplante said his Justice Department colleague “wasn’t thinking.”

The Justice Department’s Office of Professional Responsibility was supposed to have looked into Tortelli’s actions, but Luque told the court Monday that neither she nor Hsia has been contacted.

After hearing arguments from both sides, Paez said he would render his decision in writing after perhaps asking the government to submit some internal documents under seal.

Luque said afterward that the cost of defending Hsia in the tax case exceeded $200,000.