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Campaigns feel effects of Hsu case

Clinton and Edwards plan to make criminal background checks on major donors. More money will be returned.

September 12, 2007|Dan Morain and Tom Hamburger | Times Staff Writers

WASHINGTON — The thorny question of tainted contributions -- and how to check for them -- gripped several election campaigns Tuesday in the wake of Sen. Hillary Rodham Clinton's decision to return $850,000 raised by disgraced political patron Norman Hsu.

In a campaign that has seen unprecedented sums raised, nearly every candidate has received money from unsavory sources. Most quickly return it. But the knotty question remains: How deeply should campaigns delve into the backgrounds of people who seek to become their new best friends?

Clinton's camp said Monday that they would begin conducting criminal background checks on major donors. Details are being worked out, but spokesman Howard Wolfson said the campaign would obtain permission from donors before conducting such a detailed check.

On Tuesday, former North Carolina Sen. John Edwards, among Clinton's rivals for the Democratic nomination, announced he also would start conducting criminal background checks on his top donors.

"We have always had an extensive vetting process for our raisers," said Edwards spokesman Eric Schultz. "But due to the recent events involving Norman Hsu and the Clinton campaign, and to err on the side of caution, we have begun doing criminal background checks as well."

Barack Obama's campaign, however, offered no change. The Illinois senator, a Democrat, raised $58 million in the first half of the year, more than all other candidates. Obama spokesman Bill Burton said the campaign would "continue to update our vetting procedures to best ensure we find any problems that could exist."

Earlier this year, Obama donated to charities about $40,000 that was raised by his longtime benefactor Antoin Rezko, who was indicted in October on federal public-corruption charges. But that was just a portion of the Rezko money: A review of Obama's campaign finance reports shows Rezko raised at least $160,000 -- and probably far more -- for the politician's campaigns dating to 1995.

Clinton's decision to return $850,000 and institute criminal background checks on major campaign fundraisers is likely to have ripple effects beyond presidential politics.

"It reminds people that a normal routine check doesn't give you the full facts," said Bob Mulholland, campaign advisor to the California Democratic Party. "Every campaign will take notice."

The Democratic Senatorial Campaign Committee, which raises funds to support candidates across the country, already had returned $43,700 donated directly by Hsu. On Tuesday, spokesman Matthew Miller said the committee was "looking into other donations to be sure they were made legally."

In December 2005, Hsu was a "co-chair" for a fundraiser benefiting Democrats running for U.S. Senate. It is not clear how much Hsu gave at the event. But campaign finance reports show that Hsu and others associated with him contributed at least $175,000 to Senate candidates in the 2005-06 election cycle.

Other candidates also planned to follow Clinton by returning not just Hsu's direct donations but the money he raised. Sen. Edward M. Kennedy (D-Mass.) plans to return $34,900 that Hsu raised for his campaigns and his political action committee, Kennedy's office said. Rep. Kirsten Gillibrand, a Democrat from New York, announced plans to return as much as $20,000 donated by Hsu's associates. Both had said earlier that they would give Hsu's personal donations to charity.

Although Edwards announced stricter procedures, he declined to return 2004 donations from Michigan attorney Geoffrey Fieger, who was indicted last month on charges related to reimbursing others for campaign donations. Edwards will donate contributions from Fieger and his associates to charity if Fieger is found guilty, Schultz said.

On the Republican side, Mitt Romney's former national finance committee co-chairman, Alan B. Fabian of Maryland, was indicted last month on 23 counts, including mail and bankruptcy fraud and obstruction of justice. Romney returned $2,300 given by Fabian, but not the money that he raised or that was given by Fabian's family.

"The money he helped raise was donated by people who have not been accused of any wrongdoing, and we saw no reason for returning it," Romney spokesman Matt Rhoades said.

Earlier this year, Romney returned $2,000 to Utah donor Thomas E. Mower, after the Los Angeles Times found that the contribution was dated in January -- when Mower was in prison for tax evasion.

The presidential candidate did not return an additional $5,000 Mower gave to a Romney-controlled committee last year, after Mower was convicted. Attorney Kirk Jowers, who oversees the committee, said Tuesday that he would review the Mower donation.

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