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Candidates Return Tainted Campaign Funds
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Candidates Return Tainted Campaign Funds

Election 2008

Candidates Return Tainted Campaign Funds

Candidates Return Tainted Campaign Funds
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Democratic presidential contender Hillary Clinton and a slew of other prominent Democrats are returning campaign contributions from Norman Hsu, a man wanted in California for failing to appear for sentencing on a 1991 grand theft charge. It's not the first time a candidate has been embarrassed by a tainted contributor.

ROBERT SIEGEL, host:

They're still raising money as fast as they can, but Hillary Clinton and other Democrats are also dumping cash this week. It's money they got from businessman Norman Hsu, an energetic donor and fund-raiser, who turns out to be wanted for his sentencing on a 15-year-old conviction.

NPR's Peter Overby reports.

PETER OVERBY: Norman Hsu got wealthy making men's clothing. Since the 1980s, he's manufactured an important post from Hong Kong, where he was born. He's invested wisely. And as one Democrat put it, he's been a leading figure in the Democratic Party. But yesterday, the Los Angeles Times reported that Hsu has a felony problem. Back in 1992, he pleaded guilty in a fraud case in California, but then missed his sentencing date. It turns out he's been a fugitive for 15 years. Now, Democrats can't shed his money fast enough.

Hillary Clinton made her first comments about Hsu's legal problem and her political problem this morning in New York. The question came up at a press conference, where Clinton had been talking about children's health and were surrounded by children.

Senator HILLARY RODHAM CLINTON (Democrat, New York): Well, obviously, we were all surprised by this news. And we have a procedure that we follow. And upon verifying it, we returned his money. And we will continue to analyze all contributions and take action if that's warranted. And I wish Mr. Hsu well in dealing with the problems that he's confronting.

OVERBY: Over the past few years, Hsu gave $23,000 to Clinton's presidential campaign and her other committees. Strictly speaking, she isn't returning the money. It's going to charities, instead. Hsu has released a statement. He said he had thought the criminal case was settled long ago and he had not sought to evade the law. His Washington lawyer is Lawrence Barcella.

Mr. LAWRENCE BARCELLA (Norman Hsu's Lawyer): He's just absolutely sort of thunderstruck and saddened.

OVERBY: Hsu donated more than $256,000 to Democratic candidates and committees - almost all of it since 2004. That's according to the Center for Responsive Politics.

Again, lawyer Lawrence Barcella.

Mr. BARCELLA: He thought that he was - as a lot of naturalized American citizens do - they really love participating in the political process. It's, you know, it's open, it's free and it's great. And they like it and he loved it. And so it's a huge disappointment to him, what's happened.

OVERBY: And Hsu did more than just write his own checks. He's raised money from other donors. The Clinton campaign lists him as a Hill raiser, someone who pledges to bring in $100,000 or more. They say he's kept his pledge and they're not planning to let go of that money. But Hsu is hardly the first political fund-raiser to embarrass the politicians he's intending to promote.

President Bill Clinton, Vice President Al Gore and the Democratic National Committee were all tainted by a fund-raising scandal in the 1996 campaign. It involved overnight stays for big donors in the Lincoln Bedroom, coffees at the White House and money laundering after an event at a Buddhist temple in Los Angeles. Fourteen fund-raisers and donors were convicted, although not any party officials or office holders.

And in 2005, one of Ohio's leading Republican fund-raisers pleaded guilty to funneling his own money to straw donors, so he could make his quota for a Bush-Cheney fund-raising dinner. He's now in prison.

Peter Overby, NPR News, Washington.

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