REDWOOD CITY, CALIF. — As Democratic fundraiser Norman Hsu confronted an old criminal case and faced a new FBI investigation Friday, a fundamental question persisted: How did Democratic presidential front-runner Sen. Hillary Rodham Clinton's campaign fail to see the red flags in Hsu's contributions?
Until this week, Clinton counted Hsu as one of her most prolific money bundlers. He gave her campaign $22,300, regularly appeared as a co-host for major fundraising lunches and dinners, and raised more than $100,000 from his friends for her presidential run.
"Obviously, we were all surprised by this news, and we have a procedure that we follow and upon verifying it, we returned his money," Clinton said this week.
When a campaign has attracted more than 500,000 donors, as Clinton's has, there is no way a candidate's staff can check out each contributor. 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.
"If I were raising money for the prohibitive front-runner for president of the United States, I would be very, very careful about who these donors are and do some level of research," said Marty Wilson, a Republican strategist and fundraiser for Gov. Arnold Schwarzenegger and others.
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.
In the early 1990s, Hsu, 56, pleaded no contest to grand theft in a scheme that cost investors $1 million, and then disappeared. On Friday, Hsu turned himself in to San Mateo County authorities.
Superior Court Judge H. James Ellis ordered him held on $2 million bail. Hsu, dressed in a sharply tailored black suit, was led from the court in handcuffs. After posting bail, the depth of his woes became more apparent. A Justice Department source disclosed that the FBI has opened an investigation into Hsu's campaign donations.
