Gore's Ties to Hsia Cast Shadow on 2000 Race
By Roberto Suro
Al Gore was the junior senator from Tennessee in November 1988 when he received an enticing proposal: Take a "cultural and educational" trip to Taiwan, and political benefits would follow.
"If you decide to join this trip, I will persuade all my colleagues in the future to play a leader [sic] role in your presidential race," said the invitation from an aspiring Democratic fund-raiser in Los Angeles.
Gore agreed to go to Taiwan, but nearly a decade later that decision is playing out in unexpected ways on his presidential ambitions.
The letter was written by Maria Hsia, who was charged last week in a six-count federal indictment with having engaged in a political money-laundering scheme. The Justice Department alleges that Hsia facilitated $100,000 in illegal contributions to the 1996 Clinton-Gore reelection effort through a California Buddhist temple that Gore visited in a controversial April 1996 event. Hsia has pleaded not guilty and has vowed to defend herself vigorously at a trial scheduled to start April 27.
The vice president was not accused of any misconduct, but his association with Hsia and the Hsi Lai Temple, an unindicted co-conspirator, has offered Republicans a tempting source of criticism. Now that Hsia's career as a Democratic fund-raiser is scheduled to be the subject of the first trial to arise from the 1996 presidential campaign, Republicans can hardly hide their glee over the prospect that the presumed Democratic front-runner in the 2000 race for the White House might find his name bandied around a courtroom.
Beyond its impact on Gore, the upcoming trial could shed new light on the fund-raising operation that is a central focus of the Justice Department's ongoing campaign finance investigation: the 1996 Democratic effort to tap Asian Americans as a new source of campaign cash.
The Hsia case also could help resolve still-murky allegations that the Chinese government tried to buy U.S. political influence with campaign contributions. Although a draft report by Senate Republicans calls Hsia an "agent" of the Chinese government, her attorney, Nancy Luque, has repeatedly denied that allegation.
Hsia and other figures who would become central characters of the 1996 fund-raising controversy first came together a decade ago in Los Angeles when they began dreaming about becoming players on the national political scene.
By the early 1980s, James Riady, the Indonesian investor whose family owns the Lippo Group conglomerate, and his top U.S. executive John Huang, who was later appointed to senior posts at the Commerce Department and the Democratic National Committee, already knew then-Arkansas Gov. Bill Clinton through their Little Rock business activities.
But Riady and Huang did not get involved in politics until 1988, after they had moved to California and met Hsia. Court records and documents collected by Senate Governmental Affairs Committee investigators show how their political network worked: Riady saw contributions to U.S. campaigns as a means of advancing his family's business interests in Asia, Huang served as Riady's lieutenant for political matters, Hsia provided Riady and Huang with access to Democratic politicians and the Buddhist temple offered a ready source of funds.
Gore was among the first and the steadiest beneficiaries of this long-term effort going back to the 1989 Taiwan trip even though the major source of controversy for the vice president has been his April 29, 1996, appearance at the temple in Hacienda Heights, Calif.
Gore himself told a television interviewer last year: "I did not know that it was a fund-raiser. But I knew it was a political event, and I knew there were finance people that were going to be present, and so that alone should have told me, 'This is inappropriate and this is a mistake; don't do this.' And I take responsibility for that. It was a mistake."
Hsia was chief among the "finance people" at the temple that day. But it was hardly the first time that Gore had teamed up with her. The first documented meeting between the two occurred in 1988, when Hsia attended a fund-raiser for Gore at the home of Democratic activist Pamela Harriman.
Campaign records and correspondence collected by Senate investigators indicate that Gore and Hsia soon became fast political friends. By 1990, Gore praised Hsia in a handwritten note, telling her simply, "You're terrific."
Gore spokesman Christopher Lehane has alternately called Hsia "an acquaintance" and "a political friend." He said last week that during Gore's long political career he has known "hundreds and thousands of people across the country," and "Maria is one of them."
But as long ago as 1989, Gore had considerably warmer words for Hsia. When she and Howard Hom, her business partner and housemate, sent a present to Gore's son, Albert, who was recuperating from a serious injury, Gore added a handwritten inscription to a typed thank-you note: "Thanks! You two are very special friends."
In December 1990 Gore wrote one of several letters thanking Hsia for her fund-raising activities in his 1990 campaign, saying, "I am deeply grateful for all that you did to make this re-election campaign a success. Your friendship and your personal commitment to my political endeavors mean a great deal to me."
In 1996, when Venerable Master Hsing Yun, the Hsi Lai Temple's spiritual leader, visited Gore at the White House to invite him to the California shrine, it was Huang who set it up. But it was Hsia whom Gore called moments before the encounter to get personal reassurances that the master "was not going to talk [about] any political issue" that might prove embarrassing, according to Senate depositions by temple personnel and a Gore staff member.
The daughter of a politically well-connected family in Taiwan, Hsia came to the United States as a student in 1973. Two years later, she received a permanent resident visa and settled in Los Angeles. Although not an attorney herself, Hsia found a lucrative niche in immigration law firms in Los Angeles, bringing in new clients from the rapidly growing Asian community.
By 1982 Hsia's business was thriving, according to documents obtained by investigators, and she had started raising money for Democrats in state and local races. Asked to explain the reason for her political activities in 1995, Hsia replied, "Because most immigrants from Asian countries believe that if the firm or the company or the people they retain, if they are politically active, they have more ability and more power to help them in their cases."
In 1988 her work for then-Lt. Gov. Leo McCarthy's Senate campaign carried Hsia from California politics to the national arena. Hsia learned that even after contributors reached the legal limit for federal donations they could keep giving to McCarthy by making donations to the Democratic Senatorial Campaign Committee (DSCC) and "tallying" the money for the party to use on his behalf.
Also that year, Hsia, Riady and several of their friends decided to conduct their fund-raising activities under the umbrella of an organization they dubbed the "Pacific Leadership Council" (PLC). "We felt that the name of an organization would give us a little more of a cohesive nature, give us a little more clout, a recognition in Washington, D.C.," said Hom.
In a deposition given to the Governmental Affairs Committee last year, Hom, a Los Angeles attorney now estranged from Hsia, described Riady's energetic involvement as a co-chair of Hsia's group. She had gotten to know him when some employees of his bank in Los Angeles needed help with their visas. When Hsia launched the PLC, Riady hosted the inaugural event at his Brentwood mansion, a DSCC fund-raiser that drew five U.S. senators (Gore was not among them).
Four days later Riady sent Hsia a handwritten note later obtained by Senate investigators. "To Maria Hsia: These are the summary of the issues needs to be followed up. Perhaps it may be best to coordinate through a person, i.e. you. Please kindly follow up and let me know of progress. Thanks, James Riady."
An attached two-page memorandum listed the political priorities Hsia was to work on for Riady, emphasizing most of all the need for "visits of U.S. senators on an ongoing and regular basis to Indonesia, Hong Kong or Taiwan" places where the Riady family had business interests. The idea, as Riady laid it out, was for trips "at our invitation or with us as hosts." Senators, he hoped, would use their influence on the government of Taiwan to allow a Riady-owned bank to open a branch there.
Soon afterward Riady told Hsia that he was too busy with his business interests to remain directly involved in the political effort, and "delegated his role to John Huang," who became Hsia's co-chair in the PLC, according to Hom.
Immediately after the 1988 elections, Huang and Hsia began to organize the Asia trip. Riady wanted it enough to put up $8,000 to get the effort started. But Riady's plans to bring a host of senators to Asia quickly ran into problems. The group could not find a corporate sponsor in Taiwan, Hom told Senate investigators. The California Buddhists at the Hsi Lai Temple came to the rescue by volunteering their counterpart in Taiwan, the Pho Kuang Shan Temple, which hosted and paid for that part of the trip in exchange for a visit by the congressional delegation.
A more serious difficulty developed, however, when one senator after another declined Hsia's invitations to take the trip. It was only Gore already a national figure after his 1988 Democratic presidential bid who said yes.
At the temple in Taiwan, Hsing, the Buddhist master, offered Gore a welcome prediction. "You can become president of the U.S.," Hsing said. An excited Gore replied, "I will visit you when I become the president," according to an article Hsing wrote last year.
After Gore returned from Taiwan, Hsia a few months later organized a $250-a-plate Beverly Hills fund-raiser for his 1990 reelection bid. Soon after that, another letter from Hsia followed in which she proposed that he "become one of the senators closest to the Asian Pacific community." She added, "But for that to occur, we need time and a special commitment from each other."
According to Senate investigators, Hsia helped direct nearly $30,000 to Gore's campaign in advance of the 1990 election. After the DSCC's system of tallying contributions to individual campaigns was deemed illegal, however, Hsia entered a criminal conspiracy with the California temple to use its funds for political purposes, investigators charge.
The alleged scheme was first tried at a national political event when Gore came to Los Angeles for a fund-raiser in 1993, and Hsia used the "straw donor" system in which monks, nuns and temple volunteers made donations and were reimbursed by the temple for them for Gore's 1996 temple visit and other events in the 1996 campaign, according to the indictment.
In the early 1990s Hsia broke up with Hom and started her own immigration and business consulting firm, Hsia and Associates. During this time Hsia also developed a relationship with Gore that went beyond fund-raising. She corresponded with his senior staff about business possibilities in Tennessee. She sought help from Gore's office on specific immigration cases and lobbied him, as well as several other prominent legislators, on immigration policy. Following Gore's 1992 election as vice president, Hsia rallied her extensive contacts in Washington and California to get Huang, the Riadys' political lieutenant, a job with the Clinton administration, eventually helping him land in the Commerce Department.
Like many others doing business in Asia, Hsia turned her attention increasingly to China as it became more open to trade and investment from the West. The Riadys were also pursuing a China strategy, and they developed business relations with large Chinese firms owned in part or in whole by branches of the Chinese government.
Republicans on the Senate Governmental Affairs Committee say in their draft report that the committee has "learned" that Hsia and James Riady served as "agents" of the Chinese government. Although congressional and federal officials have said the report is based on classified intelligence information, there is no explanation of what facts support that claim or exactly what Hsia or Riady might allegedly have done on behalf of China.
Hsia has vigorously denied the charge, and it is not mentioned in the indictment about her fund-raising activities.
Despite the controversy, she remains loyal to the Democrat who first gave her a chance to engage in national party politics. In an interview last month with the Memphis Commercial Appeal, Hsia said of the vice president: "Gore is important to this country. I don't think anybody should muddy him. We need him. He's a good man."
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