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Fugitive says he'll stop fundraising

Hsu will bow out until his case is resolved. Democratic recipients distance themselves.

August 30, 2007|Chuck Neubauer and Dan Morain | Times Staff Writers

WASHINGTON — Democratic donor Norman Hsu said Wednesday that he would "refrain from all fundraising activities" until he resolved an outstanding warrant for his arrest stemming from a 1991 criminal case in San Mateo County.

Hsu, a major fundraiser over the last three years for Sen. Hillary Rodham Clinton of New York and other Democrats, issued the statement through his attorney after the Los Angeles Times reported that he had been a fugitive for 15 years.

Prosecutors in California said Hsu disappeared in 1992 after pleading no contest and agreeing to serve up to three years in prison for defrauding investors in a Ponzi scheme.

Meanwhile, Clinton's campaign said Wednesday that it would donate to charity $23,000 in direct donations from Hsu, a New York apparel executive. And other recipients of his donations distanced themselves from the businessman.

Sens. Dianne Feinstein and Barbara Boxer of California and Edward M. Kennedy and John F. Kerry of Massachusetts; Reps. Michael M. Honda of San Jose, Doris Matsui of Sacramento and Joe Sestak of Pennsylvania; and Al Franken, a Senate candidate in Minnesota, said they would divest their campaigns of Hsu's donations.

Clinton campaign aides had said earlier that the candidate had no plans to return money donated by Hsu, but the campaign reversed itself after The Times' disclosure.

"In light of the new information regarding Mr. Hsu's outstanding warrant in California, we will be giving his contributions to charity," Clinton spokesman Phil Singer said.

The campaign has not determined whether to return money Hsu raised, but Singer said it regularly reviews donations. "Should we have the basis to return one, we shall do so," Singer said.

Hsu has donated or raised more than $1 million for Democrats and their causes. He served as a "bundler," rounding up a group of donors and then packaging their checks together. He is a member of Clinton's "HillRaiser" group, individuals who pledged to raise more than $100,000 for her presidential campaign.

In a statement issued through attorney E. Lawrence Barcella Jr., Hsu said that he "was surprised to learn that there appears to be an outstanding warrant -- as demonstrated by the fact that I have and do live a public life. I have not sought to evade any of my obligations and certainly not the law.

"I would not consciously subject any of the candidates and causes in which I believe to any harm through my actions," he said. "Therefore, until this matter is resolved, I intend to refrain from all fundraising activities on behalf of all candidates and causes."

Hsu has led a high-profile life in Democratic circles in recent years, regularly showing up as co-chair of fundraisers. He was, for example, at a Democratic presidential candidate debate in Iowa this month.

Hsu was to be among the hosts of a Sept. 30 fundraiser in Woodside, Calif. Other hosts for the event include venture capitalist Charles Beeler, and former high-tech company executive Don Listwin, who founded the Canary Foundation to combat cancer. Donors are expected to give $2,300 each.

The event will still go on, albeit without Hsu.

Hsu has donated to an array of Californians, including $1,000 to Los Angeles Mayor Antonio Villaraigosa, $7,000 to former Assembly Speaker Bob Hertzberg for his run for Los Angeles mayor, and $10,000 to a failed initiative pushed by entertainer Rob Reiner to create universal preschool.

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chuck.neubauer@latimes.com

dan.morain@latimes.com

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