September 1, 2007

Justice Opens Investigation Of Hsu

The Department of Justice has opened an investigation into the fundraising activities of Norman Hsu, the man who put over a million dollars into Democratic coffers while remaining a fugitive con man. They want to find out whether more than just coincidence linked heavy donation activity between Hsu and at least two households of more modest means -- and the answers could prove very embarrassing for top Democrats:

The U.S. Justice Department is investigating possible campaign-finance violations by top Democratic fundraiser Norman Hsu, according to people familiar with the probe. On Friday, Mr. Hsu surrendered to California officials on an unrelated grand-theft charge dating to the early 1990s.

Mr. Hsu, who, until earlier this week was one of the biggest fundraisers for Democratic presidential frontrunner Hillary Rodham Clinton, was booked at the San Mateo County jail, where he was handcuffed and later released on $2 million bail. Wearing a black suit and white shirt, Mr. Hsu rushed to a waiting black Chevy Suburban outside the jail lobby Friday afternoon without answering any questions from reporters.

Mrs. Clinton's campaign declined to comment yesterday. The New York senator, along with other Democrats, has said she would turn over donations received from Mr. Hsu to charity.

But Mr. Hsu's legal woes are a political blow to the many prominent Democrats who accepted his funds, in particular Mrs. Clinton. While there is no sign any of them were aware of Mr. Hsu's actions and prior record, they could be embarrassed by the probe of his fundraising.

It may prove more than just embarrassing. No one can determine where Hsu got his money -- and that's just the cash he personally donated. If the Justice probe shows that he used other people as fronts to move money illegally to Democratic candidates, that will deepen the mystery of the source of Hsu's funds even further.

According to the Wall Street Journal, Hsu fled to China after his fraud conviction. Records show him working for a Hong Kong exporter for the two years after jumping bail. If Hsu turns out to have gotten his funds from international sources hostile to the US, giving the money to charity will do little to restore reputations.

Even just for using fronts like the Paw family, Hsu faces some stiff prison time. In 2002, Congress made such activities criminal, and Hsu could get 5 years and a $250,000 fine on each count. That's federal prison time, where parole doesn't exist and good behavior gets at best a 15% reduction in time served.

If the DoJ finds a foreign source for those funds, Hsu's sentencing will take a back seat to the sentence of the American people on those who took his money without checking him out. This could get very ugly for the Democrats.

UPDATE: You have to give credit to the LA Times. They haven't let up on this case. In today's edition, they demonstrate how easy it would have been to discover the con man behind the shower of cash:

Clinton and her aides said there was little they could have done to protect themselves, but fundraising experts from both parties pointed to warning signs that should have given aides pause. ...

The most obvious red flag: A check of a commonly used database produces a 1990 San Francisco Chronicle news story detailing how Norman Hsu had been kidnapped by gang members in the San Mateo County suburb of Foster City. A second widely used database discloses that Norman Yuan Yuen Hsu of Foster City had a bankruptcy in 1990.

Having established that he lived in San Mateo County, a check of the San Mateo County Superior Court's website reveals that Norman Yuan Yuen Hsu had a criminal case.

The LAT quotes "aides to Clinton" as saying that Hsu never asked any favors and just liked having his picture taken with politicians. Uh, riiiiiiiiiight. And he committed the latex-glove fraud because he likes shaking hands with doctors. I suspect the FBI may have more information on whether Hsu asked for a favor or two every hundred thousand dollars by the time they complete their investigation.

UPDATE II: Gateway Pundit noticed that Hsu's name came up in the 1996 campaign finance scandal involving Charlie Trie and connections to China. It's tangential -- Hsu's name comes up in relation to a donation made to "Friends of Norman Hsu" by Sioeng San Wong. Even tangential, it connects the two scandals, and it could explain the FBI's interest in the case. Good work by Gateway Pundit in digging this one out.

UPDATE III: Commenter Lucky Bogey says GP wasn't the first to make the connection. Check the comments for the links.


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