Hsu's Troubles

Norman Hsu, the financier who fled a fraud conviction to build a new identity as a money man for Democratic politicians. When he was rearrested, Hillary Clinton's campaign returned $850,000 it had received through Hsu.

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SCOTT SIMON, host:

The strange saga of Norman Hsu continues to evolve. Mr. Hsu is the financier who fled a business fraud conviction in California 15 years ago and built a new identity as a major contributor for Democratic politicians. When he was rearrested two weeks ago, Senator Hillary Clinton's presidential campaign announced it would send refund checks totaling to $850,000 to donors that Mr. Hsu had recruited for Senator Clinton.

NPR's Peter Overby has been following this story. Peter, things have gotten worse for Norman Hsu this week.

PETER OVERBY: They have definitely gotten worse for him. He's stuck in jail in California for at least another week. There was a court hearing yesterday and the day before that, there was a criminal complaint filed against him by the U.S. Justice Department in New York. That complaint alleges business fraud and also campaign finance violations. And it says that he confessed to these things to FBI agents.

SIMON: The campaign identified, I believe, 260 individual contributors for who Norman Hsu is supposed to be the bundler. Now, of course, the whole idea of campaign finance laws is that you're limited in the amounts you can give. But here was somebody who was apparently according to report, so far, bundling the contributions of 260 people, some of whom he barely knew.

OVERBY: Yeah, bundling is a fairly standard thing and get to that in a minute. The interesting thing is how did Norman Hsu get to be a bundler. He started out as a businessman in California. He pleaded no contest to this business fraud conviction in 1992 then he disappeared. And some years later, he reappeared in New York raising money for Democrats, all sorts of Democrats, including the $850,000 for Hillary Clinton's presidential campaign.

SIMON: And as I, at least, was reading the reports this week, arguably his success in business was tied to his identity as a major contributor to political campaigns.

OVERBY: Yes, when the criminal complaint was announced yesterday in New York, that's what the U.S. attorney was saying that Hsu seemed to be doing the money raising to enhance his stature, to make himself seem like a political player. He wasn't asking for favors from the politicians. He was using it to promote himself.

SIMON: This is obviously an important campaign story during an election year, but what does it have to tell us about campaign finance reforms?

OVERBY: Well, campaign finance reform has managed to limit the size of the checks that presidential candidates can collect. The bundlers who collect those checks for the candidates have virtually no disclosure and no accountability, and there could be more questions about other bundlers later on.

SIMON: NPR's Peter Overby, thanks very much.

OVERBY: My pleasure.

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