Candidates' reliance on 'bundlers' let Hsu thrive

WASHINGTON — When Bill Clinton received an award at a gala dinner honoring the late Robert F. Kennedy last year, the former president expressed his thanks before an audience that included a Nobel Prize winner and a glittering array of show business celebrities and Wall Street titans. Yet the second sentence of his remarks expressed special gratitude to a man almost no one there had heard of: "our friend Norman Hsu."

The story of Hsu, the major Democratic fundraiser who turned out to be a fugitive from justice, is a tangled one that stretches back more than 15 years. But more recent developments in the world of campaign finance helped create the environment in which a man like Hsu could be welcomed into the company of people like the Kennedys and Clintons.

Hsu is what is known in political parlance as a "bundler," a specialized and increasingly important kind of fundraiser for today's campaign finance managers.

Federal law limits the amount any one individual can contribute to a candidate or party. But there is no limit on how much an individual can round up in smaller contributions from friends and associates, and then deliver to a favored politician or party as a "bundle."

That twist in the law has made bundlers indispensable, especially for presidential candidates and others who must raise record amounts of money to run campaigns without public financing.

The intensified money chase has created incentives for candidates not to look too closely into the backgrounds of individuals who can deliver big-time bundles.

Until last week, the Clinton campaign, like most others, did not do the typically expensive and time-consuming criminal background checks on major bundlers -- relying instead on LexisNexis and Google searches. That changed after the Los Angeles Times reported that federal investigators were examining Hsu's current business ventures. Some investors had told The Times that they were pressed to make contributions to Clinton and other candidates.

Hsu is being held in Grand Junction, Colo. He was arrested in Colorado after failing to appear at a hearing in California last week on a 1992 grand theft conviction. He had been considered a fugitive for 15 years. On Thursday, he appeared at a bail hearing via a video linkup from his jail cell. Mesa County Judge Bruce Raaum ordered him held on $5 million cash bail, rather than the $50 million requested by prosecutors. Hsu is expected to reappear in court Wednesday at a hearing to consider his extradition to California.