Your web browser is not supported You're using Internet Explorer, some features might not work. Please switch to another browser like Chrome, Firefox, or Edge for a better experience.


An official website of the United States government Here's how you know
 **Official websites use .gov**
            
            A **.gov** website belongs to an official government organization in the United States.
 **Secure .gov websites use HTTPS**
            
            A **lock** ( A locked padlock ) or **https://** means you've safely connected to the .gov website. Share sensitive information only on official, secure websites.


Federal Election Commission | United States of America Calendar
           Glossary
          Search
              Search


Menu
      Home
      Campaign finance data
        All data
            Raising
            Spending
            Loans and debts
            Filings and reports
            Candidates
            Committees
            Bulk data
            Campaign finance statistics
        Find elections. Search by state or ZIP code
          Look up contributions from specific individuals
      Help for candidates and committees
        All compliance resources
            Guides
            Forms
            Dates and deadlines
            Trainings
        Learn about electronic filing
          Find and contact your committee's analyst
      Legal resources
        All legal resources
            Advisory opinions
            Enforcement
            Statutes
            Legislation
            Regulations
            Court cases
            Policy and other guidance
        Search across all legal resources
          Search guidance documents
      About
        All about the FEC
            News and announcements
            Commission meetings
            Mission and history
            Leadership and structure
            Reports about the FEC
            Careers
            Working with the FEC
            Contact
        Introduction to campaign finance and elections


- Home
- ›
        Legal resources
- ›
        Court cases
- ›
      USA v. HSIA

USA v. HSIA 
 Summary
 Summary

  
  
    BackgroundOn May 18, 1999, the U.S. Court of Appeals for the District of Columbia Circuit reversed a district court decision to dismiss five counts of a six-count criminal indictment charging Maria Hsia, a Democratic fundraiser, with collecting and disguising impermissible contributions in the 1995-96 election cycle.The five counts of the indictment that were reinstated accuse Ms. Hsia of causing the Clinton/Gore '96 Primary Committee, the Democratic National Committee and The Friends of Patrick J. Kennedy '96 to make false statements in their reports filed with the FEC. The appellate court also denied Ms. Hsia's cross-appeal of the remaining count in the indictment, which accuses her of conspiracy to defraud the FEC and the Immigration and Naturalization Service.The court remanded the case to the U.S. District Court for the District of Columbia for further proceedings.The Department of Justice (DOJ), which filed this suit, alleged that Ms. Hsia and the International Buddhist Progress Society (IBPS), an incorporated, tax-exempt religious organization in California, funneled money through straw donors to various campaigns. The indictment alleged that Ms. Hsia and IBPS asked nuns, monks and others with ties to IBPS to make contributions to Democratic campaigns, and later reimbursed them with IBPS funds. Ms. Hsia was also accused of using straw donors to funnel money from two clients of her Los Angeles immigration consultant business to Democratic campaigns.The Federal Election Campaign Act (the Act) prohibits corporations from making contributions in connection with any federal election. 2 U.S.C. §441b(a). The Act also prohibits any person from making a contribution in the name of another. 2 U.S.C. §441f. Additionally, the U.S. tax code bars certain organizations, such as IBPS, from participating in any political campaigns. 26 U.S.C. §501(c)(3). Finally, under 18 U.S.C. §§2 and 1001, it is unlawful to willfully cause an offense by another person against the United States.Appeals court decisionThe appeals court first addressed the willful nature of Ms. Hsia's alleged conduct. The district court had concluded that Ms. Hsia's actions were not willful because the DOJ failed to show that she knew her conduct was unlawful. The appellate court, however, stated that the government need not prove that Ms. Hsia knew that her conduct was unlawful; only that she knew that the information provided to the political committees regarding the sources of contributions was false and that she intentionally caused false statements to be made by another.The appeals court also rejected the district court's finding that the causal link between Ms. Hsia's conduct and the false statements in the political committees' reports was too "attenuated." In fact, the appeals court concluded the conduit scheme together with the names on the checks caused false statements to be made by the political committees. The appellate court pointed to several cases where the courts previously upheld applying the "false statement prohibition" to conduit contribution schemes. In those cases, defendants used straw donors to conceal their own contributions. Here, Ms. Hsia did not funnel her own money to straw donors: instead, the money belonged to immigration clients or to IBPS. Hsia, however, arranged for the conduits to do their part. The distinction of whose money was used is irrelevant to this situation, the appeals court found. FEC regulations state that a contribution made by check should be reported as a contribution by the last person signing it. 11 CFR 104.8(c). "The simple interposition of conduits to sign the checks is certainly enough to 'cause' a committee to make false statements in its report," the appeals court wrote in its decision.The appeals court also rejected the lower court's finding that the contributor information filed with the Commission by the three committees was "literally true." The district court had reasoned that, because the indictment did not allege that the committees' treasurers had any wrongful knowledge about the true contributors, the statements in their reports had to be considered in compliance with the Act, and therefore not false.This reasoning assumes that the safe harbor provision protecting treasurers of political committees who use "best efforts" to report all required information, 11 CFR 104.7, modifies the substantive reporting requirements of the Act. However, the court added, "it would make no sense for Congress to allow treasurers to rely on the provision of information by others while at the same time giving others a virtual carte blanche to provide inaccurate information."Source:   FEC Record — July 1999; USA v. Hsia, 176 F.3d 517 (D.C. Cir. 1999).


This information is not intended to replace the law or to change its meaning, nor does this information create or confer any rights for or on any person or bind the Federal Election Commission or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (52 U.S.C. 30101 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions and applicable court decisions.


About
          Careers
          Press
          Contact
   Privacy and security policy
          Plain language
          No FEAR Act
          Strategy, budget and performance
 Open government
          Protected Voices
          USA.gov
          Inspector General
          FOIA
 OpenFEC API
          GitHub repository
          Release notes
          FEC.gov status


Federal Election Commission
 The FEC's Twitter page
            The FEC's YouTube page Sign up for FECMail


Hide glossary Glossary Search terms