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Liu deputy admits donor reimbursement offers were wrong

New York City Comptroller John Liu is seeking

New York City Comptroller John Liu is seeking the Democratic nomination for mayor in this year's election. (Feb. 26, 2013) Photo Credit: Nancy Borowick

A top deputy to Comptroller John Liu grudgingly admitted Thursday that she had been "wrong" to offer to reimburse relatives for campaign donations after she was admonished by a federal judge to stop dodging the question.

Former Liu press secretary Sharon Lee, testifying without immunity in the fundraising corruption trial of two Liu aides, repeatedly dodged questions from prosecutors about whether she knew what she did was wrong by saying, "I didn't realize how bad it was."

Finally, U.S. District Judge Richard Sullivan barked at her, "Answer the question! You can't just answer the way you want."

Lee, a poised witness who just left a post as research coordinator in the comptroller's office to join Liu's mayoral campaign, appeared shaken. "Yes," she answered when asked again if her behavior was wrong.

Former Liu fundraiser Xing Wu "Oliver" Pan, 47, and former campaign treasurer Jia "Jenny" Hou, 26, are charged in the case with conspiring to fraudulently obtain matching funds from New York City by falsely reporting contributions from so-called "straw donors" who are reimbursed by others.

Hou is also charged with obstructing justice by failing to turn over fundraising emails. The case grew out of an investigation of Liu that began in 2009. He was never charged and has denied knowledge of a straw-donor scheme, but the trial has clouded his mayoral campaign.

Lee admitted she offered to reimburse her mother, aunt and friends as the campaign tried to meet a $1 million fundraising goal in 2011. She made the calls while working at Hou's apartment to help complete campaign filings, around the time an ex-boyfriend of Hou testified that Hou offered to reimburse him.

Neither woman actually paid a reimbursement. Prosecutors say the evidence shows that use of straw donors was common and condoned in the Liu campaign. Lee insisted that the offers were errors in personal judgment that the government has exaggerated.

"I hadn't thought it through," said Lee, who refused an offer of immunity because she thought it would imply the charges of campaign-wide fraud were correct. "It was to convey the importance of the campaign to me personally because my friends and family are not politically active."

In other testimony, FBI agent Samantha Bell described efforts to recruit Pan and Hou as informants. She said she told Pan to "think of his family." Questioned by Hou's lawyer, she denied warning Hou that she might get "thrown under the bus" because of Liu's lengthy relationships with other top female aides.

An undercover FBI agent testified that he gave Pan money to recruit and repay donors to a Liu fundraiser. Two Queens businessmen have testified they reimbursed donors, but testimony has not linked the schemes to Hou or other campaign officials.

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