Advertisement

The Nation

Donor surrounded by wealth, mystery

Norman Hsu is linked to shadowy businesses and unsavory episodes.

August 31, 2007|Greg Miller and Chuck Neubauer | Times Staff Writers

WASHINGTON — Money has brought both trappings and trouble for Norman Hsu. Major contributions to the campaigns of Sen. Hillary Rodham Clinton and other candidates have made the apparel executive an insider in elite political circles. He shows up in cozy pictures with politicians, at lavish fundraising events, and on the boards of prestigious organizations.

But Hsu's history includes more unsavory episodes and associations. In 1990, he allegedly was kidnapped by Chinese gang members in San Francisco as part of an apparent effort to collect a debt. A year and a half later, he pleaded no contest to a charge of fleecing investors in what authorities called a Ponzi scheme of fraud. Along the way, he left a bankruptcy filing and bitter investors who accused him of making off with their savings.

Hsu is now at the center of a political scandal, with Sen. Clinton (D-N.Y.) and others rushing to return his contributions and sever embarrassing ties to a man still wanted on an outstanding warrant for the fraud case in California. Hsu could turn himself in as early as today in San Mateo County, where a hearing on the matter has been scheduled.

"The 15-year-old legal matter that Norman Hsu has is moving toward resolution," said San Francisco attorney James J. Brosnahan in a statement to The Times. Hsu hired Brosnahan to represent him in California.

Court documents and interviews with close associates of Hsu have shed considerable light on his unlikely emergence as a major Democratic fundraiser. But much of Hsu's story remains a mystery -- including how to account for significant gaps on his resume and record, and where he got all the money that he has showered on Democratic candidates and causes.

Clinton and other candidates have scrambled to distance themselves from Hsu's money. At a New York event Thursday, Clinton said: "I wish Mr. Hsu well in dealing with the problems he's confronting."

But he has powerful defenders. Former Sen. Bob Kerrey (D-Neb.) said in an interview that Hsu was being pilloried unfairly.

"This isn't Osama bin Laden or some drug kingpin," Kerrey said. "What he's done is he's volunteered to help people raise money for their campaigns. That doesn't make him either unique or bad."

Kerrey said he recruited Hsu to serve on a board of directors at New York City's New School university, of which Kerrey is president. Kerrey said Hsu had called him earlier this week to warn him about coming media coverage. Kerrey added that Hsu had been "a terrific member" of the New School board and had not been asked to step down.

Former Hsu associates who lack the stature of the onetime Democratic senator offer a different account.

An ex-girlfriend -- who is identified in court records but who asked not to be named in news accounts for fear of reprisal -- said Hsu had conned her out of nearly $100,000. "He took advantage of me," she said.

Hsu has some valid academic and business credentials. He received a master's degree in business administration in 1981 from the University of Pennsylvania's Wharton School, and he went on to set up a series of apparel-related companies in Southern California.

News clippings from the mid-1980s describe the Hong Kong native as a budding entrepreneur in the apparel industry, behind a collection of labels like H Two O and Charlie U.S.A. A 1983 business news story reported that one of Hsu's companies, a San Francisco-based firm called Laveno, had sales of $400,000 and that the amount "should increase tenfold" in the coming year.

Hsu left Laveno in 1984; it went bankrupt a year later. Other clothing ventures followed a similar pattern. By the early 1990s, Hsu's business dealings had landed him in trouble with law enforcement officials as well as investors.

The most alarming episode came in 1990, when police in Foster City, south of San Francisco, stopped a vehicle that had run a red light at 3:40 a.m. Inside, police found four men. According to news accounts, a frightened Hsu managed to tell police he had been kidnapped.

News accounts say Hsu was assaulted, and his former girlfriend said he later showed her burn marks on his arm that he said were inflicted by his abductors.

Police took the other three men in the vehicle into custody. Among them was Kwok Chung Chow, then 30, who was a high-ranking figure in one of the leading criminal gangs in San Francisco's Chinatown. At the time, police speculated that the abductors intended to extort Hsu, but a lawyer's filing in Hsu's personal bankruptcy said he had been kidnapped "allegedly by individuals who are creditors of the debtor."

The outcome of the case could not be determined by The Times. Police officials in the Bay Area said they had not been able to retrieve case records, and Chow and one of the other alleged abductors declined to comment when reached by phone by a Times reporter.

Advertisement
Los Angeles Times Articles
|
|
|