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Embattled city Comptroller John Liu’s campaign treasurer was busted yesterday on federal charges that she helped funnel illegal “straw” donations to her boss’ war chest — dealing a crippling blow to the Queens Democrat’s political career and fueling speculation that Liu himself could face charges or be forced to resign from office.
A shaken Liu last night said he will “try to sort out whatever happened and figure out how to move forward” after hearing the charges against his treasurer, Jia “Jenny” Hou.
Hou conspired to help wealthy Liu backers evade a $4,950 limit on individual contributions by using straw donors to pass along their money to his campaign, according to the federal complaint filed by Manhattan US Attorney Preet Bharara’s office.
Hou, 25, was also allegedly caught offering to reimburse a crooked donation during a series of computer instant messages on July 14 of last year, and instructing campaign volunteers on how to set up shady campaign contributions to evade detection.
Facing charges of conspiracy to commit wire fraud and attempted wire fraud, Hou also is charged with a count of obstruction of justice for stonewalling the federal probe.
She’s accused of failing to disclose the identities of 59 campaign-contribution bundlers until January — and then leaving others off the list who were key Liu fund-raisers.
She faces a maximum of 60 years in the slammer if convicted of the three charges.
The federal complaint against Hou specifically alleges that she:
* Instructed a campaign volunteer to forge the handwriting of campaign donors on donor contribution forms required by the city Campaign Finance Board.
* Offered to reimburse an individual for a donation to the campaign. “THANK YOU! I’ll mail you a ck [check] today,” she said in a July 14 text to a donor.
* Instructed another campaign volunteer and others not to accept consecutively numbered money orders as donations to evade detection about shady donations.
* Discussed ways to conceal information about bundlers.
* Worked closely with bundlers on fund-raising events in which donors were illegally reimbursed for their contributions.
* Impeded the feds’ investigation of the probe by failing to produce subpoenaed records in an apparent attempt to evade detection. The feds got evidence from other cooperators.
“New York’s campaign finance-laws are not optional . . . As today’s charges demonstrate, unlawful campaign conduct will not be tolerated,” Bharara said.
Said FBI Assistant Director-in-Charge Janice Fedarcyk, “In a very real sense, Hou is accused of undermining the democratic process.”
Appearing before Magistrate Judge Theodore Katz last night, the bespectacled Hou, clad in tight jeans, a bright blue plaid shirt and gray knit wool boots, was released on a $100,000 bond. Her next scheduled court date is March 29.
Her lawyer, Martin Adelman, said she would plead not guilty.
“There’s stuff in here I didn’t know about before. That doesn’t make it true,” Adelman said.
He also called Hou a “wonderful, idealistic young woman, and I’m confident that when the evidence comes out that that’s how she’ll be seen.”
Adelman said the Liu campaign is paying Hou’s legal bills.
The charges against Hou follow last year’s arrest of key Liu fund-raiser Xing Wu “Oliver” Pan, who allegedly got caught up in a sting operation in which he used straw donors to plow $16,000 from an undercover FBI agent posing as a businessman into Liu’s campaign.
The latest charges come as Liu was attempting to revive his hopes of a 2013 mayoral campaign — a bid that now seems impossible.
Former Mayor Koch said publicly what many other politicos said privately.
“John Liu is toast. I expect John Liu will step down before his term is over,” Koch said. “I don’t think John Liu will sleep well tonight and for many nights to come.”
Koch predicted that the feds will dangle plea bargains to Hou and Pan in exchange for information that could nail Liu.
The feds strongly indicated they have Liu in their crosshairs, suggesting he may be held responsible for campaign-finance violations. Candiates are allowed to receive 6-to-1 taxpayer matching funds for private donations up to $175.
Liu said he was “stunned” by Hou’s arrest.
“These allegations against Jenny Hou are uncharacteristic and unexpected,” Liu said.
He called Hou an “intelligent and hard-working person that I’ve come to know and depend on upon and I sincerely hope she will be treated fairly.”
He accepted blame for the growing criminal probe of his campaign operation.
“Every candidate is responsible for what happens in their own campaign and campaign finances. . . . The day-to-day operations are run by my campaign team. I’m busy running the work of the city,” he said.
Asked about whether he would run for mayor or for re-election next year, Liu said, “I’m going to sort out what exactly happened and figure out how to move forward.”
Additional reporting by David Seifman and Josh Margolin