Democratic Fund-Raiser Convicted of 5 Felonies

A Los Angeles immigration consultant was convicted Thursday on five felony counts stemming from her role in a Buddhist temple fund-raising event attended by Vice President Al Gore, handing Justice Department attorneys a major victory in their prosecution of 1996 Democratic Party fund-raising abuses.

Maria Hsia’s conviction on charges that she caused false reports to be filed with federal election officials--coming as prosecutors near the end of a three-year effort--arises from a fund-raiser that netted more than $100,000 for the Clinton-Gore reelection drive.

Hsia channeled political donations from alleged “straw parties”--persons later reimbursed largely from foreign funds--but did not cause Democratic officials to file false donor lists with the Federal Election Commission, her lawyer argued. A federal court jury rejected the argument in less than two days of deliberations.

Although the trial produced no evidence of wrongdoing or knowledge of the scheme on Gore’s part, the verdict is an embarrassment for the vice president. It raises the specter of past Democratic campaign abuses as Gore seeks to convince voters that he has the character and good judgment to be president.

Prosecutors put 27 witnesses on the stand over a three-week period to convince jurors that Hsia knew about the scheme and that her handling of donor checks represented criminal conduct leading to the false filings. Hsia did not testify on her own behalf or call any defense witnesses.

Her defense lawyers claimed there was no evidence that she knew about bogus donor checks worth $55,000 inside a sealed envelope that she gave convicted Democratic fund-raiser John Huang a day after Gore attended a luncheon at the Hsi Lai Temple in Hacienda Heights, Calif. Gore was photographed with saffron-robed nuns and monks, many of whom were listed as donors.

On Thursday, as he campaigned in New York, Gore told reporters after the verdict that he sympathized with Hsia because “she’s been a friend and a political supporter” for many years. He declined further comment, however, on grounds that “the matter is still in the courts.”

Hsia, 48, a naturalized U.S. citizen born in Taiwan, was depicted by defense attorney Nancy Luque as an activist who sought only to give the Southern California Asian community more political clout. Hsia declined comment outside court.

Luque said she was heartened that U.S. District Judge Paul L. Friedman, who presided at the trial, postponed setting a date for sentencing until after he hears defense arguments on May 15 for a judgment of acquittal. As a sign that he continues to have misgivings about the case, the judge did not immediately enter a judgment of conviction, which normally follows a jury verdict.

Friedman has expressed reservations about whether Hsia could be held legally liable for false election reports filed by others. Two years ago he dismissed the core of the government’s case, saying that prosecutors had used “Alice in Wonderland” logic to claim Hsia was responsible for false filings. But an appellate court said that it did not understand Friedman’s reasoning and reinstated the charges.

Nonetheless, the Hsia verdict gives added momentum to the Justice Department’s next major prosecution by its campaign finance task force: the case of Pauline Kanchanalak, a Thai businesswoman and Washington lobbyist who is accused of funneling foreign contributions to the Democratic National Committee.

As was Hsia, Kanchanalak is charged chiefly with causing the DNC and other political committees to file false reports with the FEC. Although her trial is set to begin next month, Kanchanalak now may feel more pressure to reach a plea agreement.

If Hsia’s conviction holds up, she could face a maximum term of 25 years in prison and more than $1 million in fines. However, prison sentences for convictions in FEC cases have been rare.

Justice Department prosecutors investigating Democratic election abuses have fared far better than congressional Republicans thought they would. Sen. Fred Thompson (R-Tenn.), chairman of the Governmental Affairs Committee, and Rep. Dan Burton (R-Ind.), chairman of the House Government Reform Committee, have called repeatedly in recent years for Atty. Gen. Janet Reno to seek appointment of an independent counsel, but Reno insisted that her own staff prosecutors could do the job.

To date, of 22 people charged with election law violations in the department’s three-year inquiry, 17 convictions have been obtained--all guilty pleas, except for Hsia’s. They include such prominent figures as Huang, the former top-rated Democratic fund-raiser who testified at Hsia’s trial; Yah Lin “Charlie” Trie, the former Little Rock, Ark., restaurateur and Clinton friend, and Democratic donor Johnny Chung of Torrance.

However, no charges have been filed against any high-level officials in the Democratic Party or at the White House.

Thompson hinted Thursday that he was pleasantly surprised by the jury’s verdict, telling reporters: “I don’t know who was more surprised, me or the Justice Department.”

Burton said he was “disturbed” that the Justice Department sought to portray Democratic committee officials as victims of Hsia’s conduct when it was clear that they “knew about” the violations.

Republican National Committee Chairman Jim Nicholson said that it is time for the “Clinton-Gore Justice Department . . . to get beyond the small fry and take on the major players like Al Gore.”

In all, the DNC eventually returned $3 million to 1996 donors because it suspected the funds originated illegally from abroad.

Federal campaign rules limit individual contributions to $1,000 to a candidate, but unlimited amounts may be donated in so-called soft money to political parties for “party building” activities and issue advertising. Congressional hearings showed that soft-money contributions, however, often have been used directly in campaigns.

Contributions from foreign sources are outlawed.

*

Times staff writer James Gerstenzang contributed to this story.