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The Nation

Hsu's associates fell for his charm -- and his illusions

The Democratic donor is described as likable, with a back story that tugged heartstrings. He also was shrewd.

September 16, 2007

Last year, to celebrate New York Sen. Hillary Rodham Clinton's reelection victory, Norman Hsu capped an amazingly successful year as a Democratic fundraiser by treating members of her campaign staff to several days at the glitzy Mandalay Bay hotel and casino in Las Vegas, complete with free show tickets and dinners at posh restaurants.

Among Hsu's guests was Patti Solis Doyle, who now heads Clinton's presidential campaign and has long been one of Clinton's most trusted advisors.

It was all legal and, Clinton campaign officials say, was typical of Hsu, the kind of thoughtful gesture for which they considered Hsu a treasure.

First and foremost, he always came through when contributions were needed, an eye-popping $850,000 -- all of which Clinton's presidential campaign is now returning. The money was bundled together from roughly 260 individual donors, whom Hsu brought into the Clinton fold.

Clinton's campaign spokesman, Howard Wolfson, emphasized that Hsu never asked for any legislative favors from the senator in return.

It was only recently that serious doubts began to emerge. "Now we realize that this was all part of his persona," a senior campaign aide said, requesting anonymity because he was not authorized to discuss details of the case.

Hsu's business activity "was reinforced by his efforts in politics and philanthropy," the aide said. "He seemed like a generous guy, but only later did you realize what he was up to."

The Clinton campaign was not alone. Dozens of politicians -- along with clusters of private investors from Orange County and the Bay Area to New York -- tell much the same story about the man who now sits in a Colorado jail, facing new investigations by local and federal authorities.

For all who did business with Hsu, the pattern is remarkably consistent: an initial attraction to a likable individual who offered the moon, followed by disillusionment and feelings of betrayal -- sometimes tinged with embarrassment at having been gullible.

Many questions remain about Hsu's often murky career. How could he rise to such heights, given that he had been a fugitive on a felony grand-theft charge since 1992? Why did no one ever dig into the background of a benefactor who seemed to emerge from nowhere? Exactly where did the hundreds of thousands of dollars that he showered on politicians come from?

And how was Hsu able to continue organizing multimillion-dollar financial schemes despite a trail of business failures and disappointed, often accusatory, investors? After all, he had no obvious source of income and had gone bankrupt twice.

An examination of court documents and financial reports -- as well as interviews with government officials, business associates and others who dealt with Hsu -- suggests that the people who say he deceived them were lulled by a remarkable combination of personality traits and shrewdly constructed illusions.

With a gregarious if self-effacing demeanor, Hsu had a knack for winning friends and inspiring confidence. Classmates at UC Berkeley remember him as extremely popular. A manager at the Red Square bar at Mandalay Bay, where Hsu took the Clinton aides, said he was known as "a very friendly guy" who was nice to the staff.

A slight figure in exquisite suits, Hsu spoke softly and exuded an air of unthreatening success, associates say.

And beginning sometime around 2003, Hsu seemed to hit on a system for further leveraging those personal assets.

By living on a lavish scale, he convinced associates that he was backed by great personal wealth. He also made a point of doing favors. He would provide hard-to-get dinner reservations at exclusive restaurants, or bestow elegant gifts on associates. Clinton confidant Solis Doyle got a coveted, and pricey, designer handbag -- a gift that made her so uncomfortable she returned it.

Even as he was ingratiating himself, Hsu used his ready access to the world of celebrity politics to enhance his credibility with potential business investors. And some investors said he or his associates pressured them to make campaign contributions, further cementing Hsu's standing in the political world.

Several investors admitted they were agog when Hsu took them to fundraising parties with the likes of Barbra Streisand and Steven Spielberg.

"This guy took us to huge events," one woman said. "We thought he was for real."

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Friends lost money

In the late 1980s, Hsu began promoting an investment syndicate involving apartments. A group of former Berkeley classmates and other friends invested up to $50,000 each.

As some of them remember Hsu, he was an appealing figure with a poignant life story. An emigre from Hong Kong, he was apparently alone in the world after his parents died, yet he showed enough pluck to graduate from Berkeley in 1973 and earn an MBA from the Wharton business school eight years later.

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