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The Strange Case of Norman Hsu

The going suspicion in Washington has always been that politicians are not prone to ask too many questions of contributors as long as the checks keep coming. But never has a contributor's hidden past blown up in a campaign's face quite like it has for the Clinton campaign in the case of Norman Hsu.

The story began just two weeks ago when The Wall Street Journal noticed that one of Hillary Clinton's biggest donors was a family that lived in a single story home near the San Francisco airport. The father, William Paw, was a mail carrier; his wife was a homemaker. And yet the couple and their children had given $45,000 to Clinton since 2005. The contributions closely, and suspiciously, matched the timing of those by a New York businessman named Norman Hsu. It's illegal to reimburse individuals for making campaign contributions.

The next day, The Los Angeles Times made the story a scandal when it reported that Hsu had been convicted in California state court of stealing $1 million from investors in the early 90s. He'd failed to show at a sentencing hearing and been on the lam ever since.

After that story, he made his way back to California, but then promptly disappeared again after posting $2 million for bail. After sending out a "To Whom It May Concern" suicide note via FedEx to acquaintances and charitable organizations to whom he'd donated (like, ironically enough, The Innocence Project), he hopped on an Amtrak train to Chicago. On the train, he locked locked himself in a compartment. A passenger discovered him the following morning shirtless, wedged against the door in the fetal position. Pills were scattered over the floor. He was arrested after being transferred to a hospital in Colorado.

Despite all the scrutiny of Hsu, a number of mysteries remain, the main one being what Hsu was after, another being where all this money came from. Hsu managed to raise the staggering sum of $850,000 in just the last eight months for Clinton from some 260 contributors, and that's not counting the money he's delivered for a long list of other Democrats since 2004.

For his part, when first contacted by the Journal, he responded via email:

"I have NEVER asked a single favor from any politician or any charity group. If I am NOT asking favors, why do I have to cheat...I've asked friends and colleagues of mine to give money out of their own pockets and sometimes they have agreed."

Hsu was "shocked, sad and angry that you have chosen to pick on me for NO reason," he wrote.

It's proven difficult to stop picking on Hsu. Yesterday the Journal reported that he owes investors some $40 million for a deal to manufacture apparel in China for Gucci, Prada and other private labels. Hsu, in fact, a graduate of Berkeley and the University of Pennsylvania's Wharton School, seems adept at getting people (even sophisticated investors) to trust him with large sums of money. In this case, the chief victim was Joel Rosenman, one of the creators of Woodstock and the owner of a Madison Avenue investment firm. It appears to be a repeat of Hsu's crime in the early 90's: he lured investors in with promises of big bucks from China (in that case, the product was latex gloves), even delivering on early, smaller deals before failing to come through once investors were in waist deep.

Now the FBI has opened preliminary inquiries into possible fraud and whether Hsu broke the law by reimbursing contributors. Clinton has returned the $850,000, starting a chain reaction for other Dems to give back their Hsu money.

So why didn't the Clinton campaign realize that their biggest contributor was a crook? They say that they did check him out, but the information about his prior arrest didn't come up on their search of public databases. The reason? Their search didn't "include the two middle names Hsu used in the California case." When a California businessman told them that Hsu was engaged "in a risky investment scheme and was using Hillary Clinton's name 'in vain' to solicit people for his business proposition," the campaign ran another check -- and came up with nothing again.

As a result, the Clinton campaign says that they'll now do criminal background checks on major donors. This time around, there might be a special emphasis on middle names.

Note: Clinton has returned contributions given through Hsu, but left the door open for contributors to give it right back.


30 Comments

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Who knows what this is about. One thing is for sure: the right wing is out to get Clinton any way it can and so it is no surprise that it was the WSJ that brought all this to light. They should be investigated along with Hsu.

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@luxdem

Come on. Replace "right wing" with "liberals", "Clinton' with "Bush", "WSJ" with "NYT", and you've got the generic Freerepublic response to almost any anti-Bush/Rove accusation. If the WSJ story proves to be true, Clinton screwed up and she'll have to make it right.

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The new Mark Rich? Why do the Clintons have a history of hooking up with people who are (1) in legal trouble and (2) have lots of money?

Meanwhile, the Repugs are salivating at the opportunity to run against a Clinton, believing that she is the only candidate that gives them a chance to keep the WH in 08.

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Essayist, how is she going to make it more right? The money has been returned...there's nothing else for her to do.

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Perhaps, Mr. Hsu should hire a lawyer good at getting pardons... I hear Scooter Libby's free these days.

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so it is no surprise that it was the WSJ

seriously. 'The Wall Street Journal noticed that one of Hillary Clinton's biggest donors was a family that lived in a single story home near the San Francisco airport.'

they were tracking down donors.

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TO LUXDEM: Yup, we'll get right on the WSJ "investigation".....why how dare they bring a Hillary Clinton scandal to light. What do they think they are, a newspaper or something? 8-)

GO HAVE ANOTHER TALL GLASS OF DEMOCRAT KOOL-AID and let the adults settle this - OK?
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To TPM: It's about time you covered this story about the Dem's Jack Abramoff. I guess my email of 9/12 to Josh lit a fire under your asses. GOOD!

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"The adults." That's funny. It only takes a few minutes perusal of the level of dialogue on conservative sites as compared to liberal sites to see who the adults are. Joshblows, go back to wizbang. You're in way over your head here.

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My take on this guy is that he really, REALLY wants to avoid going to prison.

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I'm not defending her - quite honestly I'm no fan but I can only imagine the caliber of donors our closeted, immoral republicans have. If only someone would sink their journalistic chops into that sink hole, imagine what bats would fly out.

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As a result, the Clinton campaign says that they'll now do criminal background checks on major donors. This time around, there might be a special emphasis on middle names.

Whoa there. Clinton is guarded by the Secret Service who does background checks. Do you really think she does not know his history given that she was at many functions with him?

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"they were tracking down donors."

This used to be called investigative journalism. Hilary, like Bill, has a habit of very shady fundraising. Namely, their fundraisers are either crooks themselves, or they are laundering donations from other people and donating in their own name; the likely reason being that the laundered donations are not from a legal sources.

I'm reminded particulary of Algore raising a chunk of cash from Buddhist nuns.

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When I first heard about this story and the amount in question was some 20 or 40,000, my thought was "ho-hum, another manufactured donor story, campaigns can't be expected to check out anyone who donates..."

But nearly a million dollars? And the Clinton campaign didn't notice? I don't care if the donor in question is Hsu or Shoemaker. That beggars credibility -- at the very least, a competent fundraising organization would have a substantial file on the man simply for the purpose of sucking up. I guess the campaign argument is we're either incompetent or amoral.

Charming.

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I'd like to work up some outrage here but I simply don't care. Seriously, the Republicans have so lowered the bar that I don't give a shit about this stuff.

Did Mr. Hsu waterboard someone or rape a 7-year-old to intimidate his parents? No? Then he is quantitatively less corrupt and evil than your local Republican Congressman who allows such behavior with a wind a nod and a wink.

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Questions:

- Why is no one checking with Norman Hsu Berkeley CS class-mates? Who paid for his student fees there or at Univ. of Penn?

- Has anyone contacted his wife (as they recently divorced)?

- After 2006 election there was a party in NYC. Mr. Hsu reportedly said that if one is not supporter of HRC then they should get out. I read it in one of the news. Why is he supporting HRC? What were his voting patterns?

In sum, there are many side questions that can be pursued as well.

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Vote for Hillary. She doesn't rape 7 year olds.

Sounds like a winning strategy, jimbo.

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"I'm reminded particulary of Algore raising a chunk of cash from Buddhist nuns.

Posted by: Seroj
Date: September 13, 2007 9:30 PM"

Considering Al Gore's concern for enviromental issues, it makes perfect sense that a bunch of Buddhists would bundle money for him.

Question- What did the Buddhist say when he ordered a hot dog???

Answer-"Make me one with everything."

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Is it just a coincedence that Mr. Hsu is also a foreign born Chinese? The previous Clinton fundraising scandal was all based on PRC officials (many from the Army / military intel) funneling money to Clinton.

This is why the story resonates in a way it would not if it was just a homegrown millionaire/criminal pumping money into Hillary's campaign.

I'm amazed that collectively Democrats are going to nominate this woman, given all her baggage. It's not only that this will effect her ability to win - and promises to deliver another bruising 'all character' campaign - there is also the matter that she and Bill have demonstrated horrible ethics.

"Better than Bush" has to be one of the lamest excuses for a campaign slogan one can immagine, particularly coming from people who rate Bush as low as an earthworm.

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HEY ERIK: Next time why don't your actually TAKE ON MY POINT? IF you can, that is.....


And enjoy your tall glass of Dem. Kool-Aid 8-)

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"...he lured investors in with promises of big bucks from China (in that case, the product was latex gloves), even delivering on early, smaller deals before failing to come through once investors were in waist deep."

This guy sounds to me exactly what the GOP would call a successfull entrepeneur. So the guy's a grifter, we have one (or more) in the White House, what's illegal about that? You gotta take the big risks to make the big wins, right? Isn't that how the mantra goes? I'm sure GOP has legions of characters that would fit Mr. Hsu's profile.

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"GO HAVE ANOTHER TALL GLASS OF DEMOCRAT KOOL-AID and let the adults settle this - OK?
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To TPM: It's about time you covered this story about the Dem's Jack Abramoff. I guess my email of 9/12 to Josh lit a fire under your asses. GOOD!

Posted by: joshblows
Date: September 13, 2007 4:43 PM "

Funny one of the Republicans campaign chair just had a 23 count felony indictment. Did this make the MSM news, significantly. >

Buzz off, Youblow!

Security code is idea, as in joshblows needs an idea.

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Guys, "Clinton did it first..." or "The Republicans are raping 7 year olds and waterboarding old ladies," are not good arguments. Anytime your only defense is to focus on the flaws of the opposition, you are in trouble.

The Clintons have a history of problems in the areas of fundraising. If you read the comments on this thread, you'll pick up on a lot of it. Is this the best nominee that we can come up with? Hillary is the last, best hope of the GOP to retain the White House.

The Clinton approach is to make a living off of being a moderate to conservative democrat who doesn't make the corporate masters nervous and is fierce in protecting Israel.

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Hey joshblows,
Next time why don't you use a few more capitals. It really helps convey the image of you with your veins bulging, screaming at the computer screen. You know there are only about 5 people left in the country who think like you, don't you? Your only point, as far as I can tell, is to hurl insults. So how 'bout you and Craig and Foley go have yourselves a good old-fashioned republican circle jerk. You ass.

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Doing checks on Chinese individuals is tough because apart from a western name Chinese also use complete Chinese names. It is easy for them to have two names which don't come up in routine checking. The problems is that all Presidential campaigns attract fund raiser of dubious reputation. If one can resist the knee jerk response to the Clintons one will find that Gore, both Bushe, Reagan and Nixon attracted some unsavoury characters. So lets drop the selective indignation. Obama has returned money too. Let me tell you what surprises me: this man paid a $2m cash bail in LA and took a train. In his latest court appearance in Colorado the judge set bail at $5m. What gives. Surely he is a flight risk and remand is called for.

Final point: Hsu was on the Board of Governors of the New School and a major fund raiser. Bob Kerrey supported him when the story hit the headlines; and after he got more info he retracted. So shouldn't the New School have been careful about the money this man brought in. Or do they get a pass.

Looks like the WSJ is in its standard anti-Clinton mode. I just hope the Hillary camps fire back. This time round the press should not get off with it smears.

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"Looks like the WSJ is in its standard anti-Clinton mode. I just hope the Hillary camps fire back. This time round the press should not get off with it smears."

How is Hillary going to "fire back"? What can she possible say? Her largest fundraiser is a convicted felon and until recently a fugtive. If you think this is a "smear" then you're batsh*t crazy.

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Chris: this is precisely what I had in mind. You assume Clinton cannot fight back. Just hold your judgement for a spell and see what happens. If you take some time and look at Rupert Murdoch's modus operandi you will understand what I mean. When the Chinese got pissed off with the BBC Murdoch's stopped broadcasting their service to China. Yep. No problem. When Tony Blair went into his first election Murdoch's papers backed Labour and gave the Conservatives a collective fit. Rupert has already contributed to the Clinton campaign and hosted a fund raiser. He has good antenna. If Hillary wins the primary watch what happens to the WSJ's coverage. Oh: don't kid yourself. Rupert fires editors: his track record speaks for itself. Don't think for a moment that the WSJ will get in the way of Rupert's own need for political support. Rupert back winners, not political parties.

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When you make it to the level of power that the US President holds, it's good to remember this little maxim;

"It's not the cream that rises, it's the scum." --Anonymous

When you wield the levers of power over a multi-trillion dollar economy, you are going to attract some unsavory characters. It doesn't matter if you are Democrat or Republican. It's not a right/left issue. It's an issue of morality. Neither party has a particular claim to it.

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Don't rule out the possibility that this "scandal" is a setup by the GOP/right-wing to embarrass Democrats to try to balance their own (GOP) problems of having their vast corruption exposed. Very significant is the source of Hsu's money. That would explain much(perhaps everything), if we could only find out the truth.

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All politicians should run the other way as fast as they can when they encounter one of these Asian bozos who's biggest deal in life involves getting their picture taken with some big-wig. They are an easily spotted type. They have no idea of accountability ethical behavior. They are the product of their mothers' upbringing. They were bailed out of every little scrape they got into as children in order to hide things from the neighbors. Hsu is typical of the types that are are in charge in Asian politics and business and we'd better learn to beware.

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A set up? Wasn't this guy wanted for illegal activities well before this incident? How can that be a GOP setup?

This is really a big to-do about nothing. If the guy is a crook and gave money, who cares? Now, if there was a quid-pro-quo where Hillary did political favors for the guy because he gave her money, then I could see people getting all bent out of shape.

Are the anti-Hillary people suggesting that we have to pull the FBI files on every contributor to political campaigns and vet their entire history? Really? Seriously?

We have bigger things to worry about in this campaign. She gave the money back, remember? If I was Hillary, I'd say "Of COURSE I gave the money back as soon as I knew he had a criminal record. I won't take money from a crook like Hsu and I never intended to take money from criminals like Hsu. Once I found out, I immediately ordered the money returned and will do the same thing whenever we find out that a donor is a wanted criminal."

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