Clinton to Return $850G to Donors Tapped By Hsu
By Glenn Thrush, Newsday, Melville, N.Y.
Sep. 11–WASHINGTON — Sen. Hillary Rodham Clinton is returning $850,000 to donors tapped by felonious financier Norman Hsu — a stunning admission that a longtime fugitive managed to buy his way into Clinton’s inner circle of fundraisers.
Clinton communications director Howard Wolfson, who initially defended Hsu, vowed that the campaign will begin conducting criminal background checks on all of its major campaign bundlers — including 82 “HillRaisers” like Hsu who committed to raising $100,000 each.
The announcement came after the Los Angeles Times reported that Irvine businessman Jack Cassidy warned authorities and the Clinton campaign in June that Hsu was engaged in shady business enterprises.
“This week approximately 260 donors will receive refunds totaling approximately $850,000 from the campaign,” Wolfson said in a statement last night.
“To help ensure against this type of situation in the future, our campaign will also institute vigorous additional vetting procedures on our bundlers, including criminal background checks,” he added. “In any instances where a source of a bundler’s income is in question, the campaign will take affirmative steps to verify its origin.”
Former North Carolina Sen. John Edwards has also begun vetting his bundlers with criminal background checks, a spokesman said.
The Clinton campaign had previously said it would donate about $23,000 in donations by Hsu and his family to charity, but they had refused to return the money he bundled until yesterday, when the Times reported that the FBI was investigating new allegations of Hsu’s illegal business practices.
The refunds announced yesterday are going directly to the donors, some of whom are believed to have business relationships with Hsu, who runs several obscure investment and textile companies. It’s not clear if Clinton will encourage those contributors to re-submit checks to her campaign.
“In light of recent events and allegations that Mr. Norman Hsu engaged in an illegal investment scheme, we have decided out of an abundance of caution to return the money he raised for our campaign,” Wolfson said.
Hsu and his family have donated $260,000 to Democratic Party candidates and organizations, including Gov. Eliot Spitzer and Sen. Barack Obama’s political action committee. He was captured by authorities in Colorado last week after failing to appear at a bail hearing connected to a 1991 California warrant in connection with a grand theft charge.
Federal authorities are looking into whether Hsu leaned on investors to contribute to political candidates after paying them big earnings from a shady business venture he was running, a law enforcement official told The Associated Press last night. Such a scam — using conduit contributors known as “straw donors” — is a violation of the Federal Election Campaign Act. The FBI may be looking at other potential charges as well, according to the law enforcement official who spoke on condition of anonymity because of the ongoing investigation.
—–
To see more of Newsday, or to subscribe to the newspaper, go to http://www.newsday.com
Copyright (c) 2007, Newsday, Melville, N.Y.
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.