Democratic Fundraiser Is A Fugitive In Plain Sight

[Ryan Ruck]

Democratic Fundraiser Is A Fugitive In Plain Sight

California authorities have sought businessman Norman Hsu for 15 years. Since 2004, he has carved out a place of honor raising cash for such candidates as Hillary Rodham Clinton.

For the last 15 years, California authorities have been trying to figure out what happened to a businessman named Norman Hsu, who pleaded no contest to grand theft, agreed to serve up to three years in prison and then seemed to vanish.

"He is a fugitive," Ronald Smetana, who handled the case for the state attorney general, said in an interview. "Do you know where he is?"

Hsu, it seems, has been hiding in plain sight, at least for the last three years.

Since 2004, one Norman Hsu has been carving out a prominent place of honor among Democratic fundraisers. He has funneled hundreds of thousands of dollars in campaign contributions into party coffers, much of it earmarked for presidential hopeful Sen. Hillary Rodham Clinton of New York.

In addition to making his own contributions, Hsu has honed the practice of assembling packets of checks from contributors who bear little resemblance to the usual Democratic deep pockets: A self-described apparel executive with a variety of business interests, Hsu has focused on delivering hefty contributions from citizens who live modest lives and are neophytes in the world of campaign giving.

On Tuesday, E. Lawrence Barcella Jr. -- a Washington lawyer who represents the Democratic fundraiser -- confirmed that Hsu was the same man who was involved in the California case. Barcella said his client did not remember pleading to a criminal charge and facing the prospect of jail time. Hsu remembers the episode as part of a settlement with creditors when he also went through bankruptcy, Barcella said.

The bulk of the campaign dollars raised by major parties comes from the same sources: business groups, labor unions and other well-heeled interests with a long-term need to win friends in the political arena.

But the appetite for cash has grown so great that politicians are constantly pressured to find new sources of contributions. Hsu's case illustrates the sometimes-bizarre results of that tendency to push the envelope, often in ways the candidates know nothing about.

As a Democratic rainmaker, Hsu -- who graduated from UC Berkeley and the Wharton School of Business -- is credited with donating nearly $500,000 to national and local party candidates and their political committees in the last three years. He earned a place in the Clinton campaign's "HillRaiser" group by pledging to raise more than $100,000 for her presidential bid.

Records show that Hsu helped raise an additional $500,000 from other sources for Clinton and other Democrats.

"Norman Hsu is a longtime and generous supporter of the Democratic Party and its candidates, including Sen. Clinton," Howard Wolfson, a spokesman for the campaign, said Tuesday.

"During Mr. Hsu's many years of active participation in the political process, there has been no question about his integrity or his commitment to playing by the rules, and we have absolutely no reason to call his contributions into question or to return them."

Wolfson did not immediately respond Tuesday night to questions about Hsu's legal problems.

Though he is a fugitive, Hsu has hardly kept a low profile. The website camerarts.com, which sells photographs taken at political events, features shots of Hsu at several fundraisers he hosted at Manhattan's elegant St. Regis hotel -- including a June 2005 luncheon for Rep. Doris Matsui (D-Sacramento).

Hsu lives in New York City. Efforts to contact him were unsuccessful. Barcella said Hsu chose to respond through his lawyer.

Records show that Hsu has emerged as one of the Democrats' most successful "bundlers," rounding up groups of contributors and packaging their checks together before delivering the funds to campaign officials. Individuals can give a total of $4,600 to a single candidate during an election cycle, $2,300 for the primaries and $2,300 for the general election.

One example of the kind of first-time donors Hsu has worked with is the Paw family of Daly City, Calif., which is headed by William Paw, a mail carrier, and his wife, Alice, who is listed as a homemaker.

The Paws -- seven adults, most of whom live together in a small house near San Francisco International Airport -- apparently had never donated to national candidates until 2004. Over a three-year period, they gave $213,000, including $55,000 to Clinton and $14,000 to candidates for state-level offices in New York.

The family includes a son, Winkle Paw, who Barcella said was in business with Hsu. Another son works for a Bay Area school board, while one daughter works for a hospital and another for a computer company.

"They have the financial wherewithal to make their own donations," Barcella said. "It didn't come from Norman."

He said that Hsu had known the Paws for a decade.

"Norman never reimbursed anyone for their contribution," Barcella said. It is a violation of federal law for one person to reimburse donors for campaign contributions.

Hsu's bundling of contributions from the Paws and others was first reported Tuesday in the Wall Street Journal.

Records show Hsu also solicited funds from three members of a New York family that helps run a plastics packaging plant in Pennsylvania. They have given more than $200,000 in the last three years.

Danny Lee, a manager at the packaging firm, has given $95,000 to federal Democratic campaigns -- $19,500 of which went to Clinton. Yu Fen Huang, who shares a New York house with Lee, has given $52,200 to Democrats, $8,800 to Clinton. Soe Lee has contributed $54,000 to Democrats, $8,800 to Clinton.

The Paws, the Lees and Huang did not return telephone calls seeking comment on their donations.

Over the years, Hsu and his associates have given to Democratic Sens. Dianne Feinstein of California, Edward M. Kennedy of Massachusetts, Barack Obama of Illinois and Joseph R. Biden Jr. of Delaware. Obama and Biden, like Clinton, are seeking the presidential nomination.

Hsu's legal troubles date back almost 20 years.

Beginning in 1989, court records show, he began raising what added up to more than $1 million from investors, purportedly to buy latex gloves; investors were told Hsu had a contract to resell the gloves to a major American business.

In 1991, Hsu was charged with grand theft. Prosecutors said there were no latex gloves and no contract to sell them.

Hsu pleaded no contest to one grand theft charge and agreed to accept up to three years in prison. He disappeared, Smetana said, after failing to show up for a sentencing hearing. Bench warrants were issued for his arrest but he was never found, Smetana said.

[Ryan Ruck]

Hillary's Donor Linked To China Missile Trader

Aerospace mogul Bernard Schwartz acted as Hsu's patron on college board

A shady Chinese megadonor to Hillary Clinton's presidential campaign has close ties to an aerospace mogul accused of placing his business interests before national security by sharing missile secrets with Beijing during the Clinton administration.

Before his forced resignation last week, Norman Yuan Yuen Hsu sat on the board of trustees of the liberal New School university in New York with former Loral Corp. head Bernard L. Schwartz, who was allowed to transfer restricted satellite and missile technology to a People's Liberation Army front after contributing a record amount of cash to President Clinton's 1996 campaign.

The New School has removed Hsu's name from its list of trustees. But the old list showing both Hsu and Schwartz is still captured on Google's cache files. Here is the screen shot.

Schwartz, vice chairman of the New School board, was among officials who introduced Hsu to the school's administration, WND has learned.

Last November, Schwartz and Hsu chaired a New School banquet at the Mandarin Oriental in New York which featured Sen. Clinton as keynote speaker. Clinton steered a $1 million federal grant to the college.

More recently, Schwartz and Hsu (pronounced shoo) appeared together at the New York Yacht Club for Democratic Rep. Patrick Kennedy's 40th birthday bash.

The pair are so-called HillRaisers – major donors to Clinton's war chest – with Hsu raising more than $1 million for her campaign. Hsu, like Schwartz, has lobbied the U.S. government to relax trade rules with China.

Before he was a Friend of Hill, Schwartz was a Friend of Bill. In fact, then-President Clinton feted Schwartz on his 71st birthday at a White House dinner.

Sources say Schwartz vouched for Hsu at New School, even though he was a fugitive convicted of grand theft in California.

New School President Bob Kerrey assumed Hsu, now in jail, was reputable. The former Democrat senator says he didn't question Hsu's credentials because he liked him. He also was taken by "his personal story, coming from China, and he had an interest in fashion as well."

"It all intrigued me," Kerrey said.

Of course, Hsu also gave generous sums of cash to Democrats and their causes, including The New School.

Kerrey assumed Hsu, a self-described apparel magnate, made his money in the garment industry. But even that claim is now in question.

It turns out that the various companies Hsu listed on federal campaign filings with the FEC no longer exist, and may always have been fictitious. Last decade Hsu declared bankruptcy.

The FBI has opened a criminal investigation into Hsu's fund-raising activities.

Republicans in Congress, meanwhile, see parallels to last decade's Chinagate fund-raising scandal, and are clamoring for public hearings to get to the bottom of what may be a new chapter in an old tale of corruption, foreign influence-peddling and espionage. All told, 22 Democrat donors were convicted in the Chinagate probe, which the Justice Department officially closed a few years ago.

After he was convicted of fraud last decade, and allegedly kidnapped by a Chinese gang in San Francisco, Hsu fled to Hong Kong, where he was born and raised. He returned to the U.S. not long after Hillary Clinton won her Senate seat. Then – for the first time – he started donating heavily to Democrats. He gave no political campaign gifts in the U.S. before 2004.

"The source of Hsu's income at this point is unknown," a congressional investigator told WND. "It begs the question, where did he get the resources to contribute so much money?"

During the last Clinton campaign of 1996, the People's Liberation Army launched a massive campaign to buy influence in the Democratic Party and steer military hardware and technology Beijing's way.

Reports by federal investigators say the PLA used a host of Chinese agents living in the U.S. as bagmen to funnel cash to the Clinton-Gore campaigns and gain access to the White House and sensitive government agencies.

Even U.S. corporate executives did their bidding. Most alarmingly, Schwartz persuaded the Clinton administration to give his Loral Space and Communications subsidiary a waiver to use inexpensive Chinese rockets to launch U.S. satellites into space.

Loral at the same time helped Beijing – over the objections of the U.S. intelligence community – improve its commercial space launchers. That in turn, helped make its nuclear-tipped missiles more reliable as ICBMs, several of which are aimed at U.S. cities.

In fact, it's believed China's recent downing of a satellite with a ground-based missile would not have been possible without Loral's technical assistance.

Schwartz, who was Clinton's top donor in the 1996 election cycle, insists his contributions did not buy policy changes regarding China. He says the favorable treatment he got from the administration was merely a "coincidence."

However, two months before he won a prized seat on a Commerce Department trade junket to China, he wrote a check to Democrats for $100,000. On the trip, Schwartz scored a meeting with China's top telecommunications official, which led to Loral winning a deal to provide cell phone service to China – a deal worth an estimated $250 million a year.

During the 1996 election cycle, moreover, Schwartz created his Loral Satellite and Communications subsidiary. He needed export controls loosened so the start-up unit could launch its satellites on cheap Chinese booster rockets, which are nearly identical to Beijing's strategic missiles that would greatly benefit from such dual-use U.S. technology transfers.

Schwartz lobbied the Clinton administration to transfer satellite export licenses to the more lenient Commerce Department. At the same time, he pumped $632,000 into Clinton-Gore and Democratic National Committee coffers.

That same year, in a major policy shift, President Clinton overturned an earlier 1995 decision by Secretary of State Warren Christopher and transferred authority for satellite export licenses to the Commerce Department, where Beijing managed to plant an agent by the name of John Huang. Loral got its waiver – over the objections of the Justice Department – and Schwartz kept on giving to the Clinton machine, in the end contributing well over $1 million.

Schwartz not only met with top officials at China Aerospace International Holding Ltd. – a PLA front – but he even formed a joint venture with the communist front company.

A key contact at China Aerospace was Liu Chaoying, a lieutenant colonel in the PLA.

In 1998, in the course of plea bargaining with the Justice Department, a Chinese bagman by the name of Johnny Chung confessed that at least $100,000 of his contributions to the DNC and the Clinton-Gore campaign had come from a Chinese aerospace executive – a lieutenant colonel in the Chinese military – who had given him $300,000. It was the same Chaoying involved with Loral, who happened to also be the daughter of the PLA's top general and a key member of China's Communist Party leadership.

Chung later told prosecutors that the $300,000 had been ordered into his bank account by the head of Chinese military intelligence, whom he said he met through the lieutenant colonel.

During the 1996 election cycle, Chung was a regular White House visitor. All told, he visited 57 times. During one visit to the first lady's office, he handed Hillary Clinton's chief of staff a check for $50,000. Three days earlier, he had received a $150,000 wire transfer from the Bank of China.

Hillary Clinton posed for a White House photo with Chung and two Chinese officials, and later penned a personal note on a print of the photo for Chung: "To Johnny Chung with best wishes and appreciation – Hillary Rodham Clinton."

Hillary Clinton rejects comparisons between Chung – and the entire 1996 Chinagate fund-raising scandal – and Hsu, her mysterious new Chinese donor.

"I don't think it's analogous at all," she said.

[Ryan Ruck]

Clinton Donor Under a Cloud in Fraud Case

Senator Hillary Rodham Clinton's campaign said yesterday that it would give to charity $23,000 it had received from a prominent Democratic donor, and review thousands of dollars more that he had raised, after learning that the authorities in California had a warrant for his arrest stemming from a 1991 fraud case.

The donor, Norman Hsu, has raised hundreds of thousands of dollars for Democratic candidates since 2003, and was slated to be co-host next month for a Clinton gala featuring the entertainer Quincy Jones.

The event would not have been unusual for Mr. Hsu, a businessman from Hong Kong who moves in circles of power and influence, serving on the board of a university in New York and helping to bankroll Democratic campaigns.

But what was not widely known was that Mr. Hsu, who is in the apparel business in New York, has been considered a fugitive since he failed to show up in a San Mateo County courtroom about 15 years ago to be sentenced for his role in a scheme to defraud investors, according to the California attorney general's office.

Mr. Hsu had pleaded no contest to one count of grand theft and was facing up to three years in prison.

The travails of Mr. Hsu have proved an embarrassment for the Clinton campaign, which has strived to project an image of rectitude in its fund-raising and to dispel any lingering shadows of past episodes of tainted contributions.

Already, Mrs. Clinton's opponents were busy trying to rekindle remembrances of the 1996 Democratic fund-raising scandals, in which Asian moneymen were accused of funneling suspect donations into Democratic coffers as President Bill Clinton and Vice President Al Gore were running for re-election.

Some Clinton donors said yesterday that they did not expect the Hsu matter to hurt Mrs. Clinton unless a pattern of problematic fund-raising or compromised donors emerged, which would raise questions about the campaign's vetting of donors. Mr. Hsu's legal problems were first reported yesterday by The Los Angeles Times; The Wall Street Journal reported Tuesday about his bundling of questionable contributions.

"Everyone is trying to make the implications that it's Chinese money, that it's the Al Gore thing all over again, but I haven't seen any proof of that," said John A. Catsimatidis, a leading donor and fund-raiser for Mrs. Clinton in New York.

Some donations connected to Mr. Hsu raise questions about his bundling activities, although there is no evidence he did anything improper. The Wall Street Journal reported that contributors he solicited included members of an extended family in Daly City, Calif., who had given $213,000 to candidates since 2004, even though some of them did not appear to have much money.

A lawyer for Mr. Hsu, E. Lawrence Barcella Jr., has said that Mr. Hsu was not the source of any of the money he raised from other people, which would be a violation of federal election laws.

On his own, Mr. Hsu wrote checks totaling $255,970 to a variety of Democratic candidates and committees since 2004. Even though he was a bundler for Mrs. Clinton, his largess was spread across the Democratic Party and included $5,000 to the political action committee of Senator Barack Obama, Democrat of Illinois.

Last month, Mr. Hsu was among the honored guests at a fund-raiser for Representative Patrick J. Kennedy, Democrat of Rhode Island, given by Stephen A. Schwarzman of the Blackstone Group at the New York Yacht Club.

Al Franken, a Democratic Senate candidate in Minnesota, said he would divest his campaign of Mr. Hsu's donations, as did Representatives Michael M. Honda and Doris O. Matsui of California and Representative Joe Sestak of Pennsylvania, all Democrats.

Mr. Hsu's success on the political circuit was not always matched by success in business.

Born and raised in Hong Kong, Mr. Hsu came to the United States when he was 18 to attend the University of California, Berkeley, as a computer science major. He later received an M.B.A. at the Wharton School at the University of Pennsylvania, according to a brief biography that appeared in apparel industry trade publications in 1986.

With a group of partners from Hong Kong, Mr. Hsu started a sportswear company in 1982 called Laveno that went bankrupt two years later, not long after he left the company. From that, he cycled through several other enterprises, mostly men's sportswear, under the Wear This, Base and Foreign Exchange labels.

Mr. Hsu's career hit a low in 1989, when he began raising $1 million from investors as part of a plan to buy and resell latex gloves.

Ronald Smetana, a lawyer with the California attorney general's office, said Mr. Hsu was charged with stealing the investors' money after it turned out he never bought any gloves and had no contract to resell them.

When Mr. Hsu was to attend a sentencing hearing, he faxed a letter to his lawyer saying he had to leave town for an emergency and asking that the court date be rescheduled, Mr. Smetana said.

He failed to show up for the rescheduled appearance, and a bench warrant was issued for his arrest. That was the last that prosecutors saw of Mr. Hsu.

"We assumed he would go back to Hong Kong, where he could recede into anonymity," Mr. Smetana said.

The California attorney general's office declined to comment on how it intends to pursue Mr. Hsu.

Mr. Hsu issued a statement yesterday, saying he was "surprised to learn that there appears to be an outstanding warrant" and insisting that he had "not sought to evade any of my obligations and certainly not the law."

"I would not consciously subject any of the candidates and causes in which I believe to any harm through my actions," he said.

At some point, Mr. Hsu resurfaced in New York, where he was connected to several clothing-related businesses, according to campaign finance records, which list his occupation variously as an apparel consultant, clothing designer, retailer or company president. He also began to donate to the Democratic Party, and arranged for friends to do the same.

He has been referred to in news accounts of campaign fund-raising events as an "apparel magnate" and his quick rise in the New York political and social scene — as well as his open checkbook — catapulted him into the big leagues.

He became a trustee at the New School and was elected to the Board of Governors of Eugene Lang College there. He endowed a scholarship in his name at the college and was co-chairman of a benefit awards dinner in 2006 that featured Mrs. Clinton, who had secured a $950,000 earmark for a mentoring program at the college for disadvantaged city youths.

Asked yesterday about Mr. Hsu, Brian Krapf, a spokesman for the New School, said in a statement that "it is inappropriate to talk about a matter involving one of our trustees, particularly while we are still gathering all the facts."

[Ryan Ruck]

Disgraced Democratic Donor Norman Hsu Arrested in Colorado

Disgraced Democratic fundraiser Norman Hsu remained in custody Friday at a Colorado hospital after his arrest days after he failed to show up for a court appearance related to a felony theft conviction.

FBI agents took Hsu into custody late Thursday at St. Mary's Hospital in Grand Junction, Colo., said FBI spokesman Joseph Schadler.

Hsu was listed in fair condition, hospital vice president Dan Prinster said in a telephone interview. He declined to provide details of Hsu's ailment, other than to say that Hsu "was delirious (when he arrived) and had identification."

FBI agents arrived at the hospital about 9 p.m. EDT Thursday, Prinster said, adding he didn't know how authorities learned of Hsu's whereabouts. "All I know is I got a call," he said.

Hsu was traveling on an Amtrak train Thursday when he became ill. An ambulance was called when the train stopped in Grand Junction and he was taken to St. Mary's.

Mesa County Sheriff's Officer Heather Benjamin said that under normal procedure, Hsu would be booked into the local jail when he is released from the hospital.

Hsu had been scheduled to appear in court Wednesday to turn over his passport and ask a judge to cut in half the $2 million bail he posted last week when he turned himself in after spending 15 years on the lam from a felony theft conviction.

Instead, Hsu failed to show up at the bail reduction hearing and a judge issued a new arrest warrant for him.

California Attorney General spokesman Gareth Lacy said Hsu's lawyers told prosecutors Hsu arrived by charter jet at the Oakland, Calif., airport about 5:30 a.m. Wednesday local time and then wasn't heard from again.

When it became apparent that Hsu had fled the state, California authorities sought the assistance of the FBI, whose agents arrested him Thursday night on charges of unlawful flight to avoid prosecution, Schadler said.

Once he is returned to state custody, the federal charges will be dismissed, Schadler said.

A string of Democratic politicians have announced plans in the past week to return or donate to charity Hsu's election contributions. The latest was Pennsylvania Gov. Ed Rendell, who said Thursday he plans to donate to charity nearly $40,000 in contributions.

New York Sen. Hillary Rodham Clinton has said she plans to give to charity the $23,000 in donations she received from Hsu for her presidential and senatorial campaigns and to her political action committee, HillPac.

[American Patriot]

Hsu was listed in fair condition, hospital vice president Dan Prinster said in a telephone interview. He declined to provide details of Hsu's ailment, other than to say that Hsu "was delirious (when he arrived) and had identification."

Never eat sushi on-board an Amtrak train, or in the presence of Her Majesty, Queen Hillary!

LOL

[Ryan Ruck]

I can't help but wonder if this was another possible case of Arkancide?

Hsu Sent Suicide Note Before Disappearance

Before Democratic fund-raiser Norman Hsu skipped a court hearing and temporarily vanished last week, he typed out a suicide note and sent copies to several acquaintances and charitable organizations, according to people who received it.

The one-page note, signed by Mr. Hsu, "very explicitly said he intended to commit suicide," said one of the recipients in an account corroborated by others, including law-enforcement officials. Mr. Hsu also apologized for putting anybody "through inconvenience or trouble," the recipient said.

The letter, which began, "To whom it may concern," arrived by FedEx at the addresses of several recipients last Thursday, the day after Mr. Hsu disappeared.

As the letters arrived, Mr. Hsu was on a Chicago-bound train from California. He fell ill and was taken to St. Mary's Hospital in Grand Junction, Colo., where he was arrested. Yesterday he was released from the hospital and transferred to the Mesa County Jail, pending extradition back to California.

A spokesman for Mr. Hsu said he wouldn't comment about the letter.

In the letter, Mr. Hsu wrote he was very upset by a wave of press in recent weeks that raised questions about his political fund-raising and business activities. Among other things, the articles brought attention to a 1991 fraud charge in California, to which he had pleaded no contest and then disappeared before his sentencing hearing.

On Aug. 31, Mr. Hsu turned himself in to California authorities after that case came to light, then posted $2 million bail. He forfeited that money after he failed to show up in court on Sept. 5.

The next day, acquaintances received the suicide note. One recipient was the Innocence Project, a New York-based charitable organization that uses DNA evidence to help free inmates. Mr. Hsu was a "significant donor," according to Eric Ferrero, a spokesman. Mr. Ferrero declined to elaborate on the note, but said he and others on the staff were very worried when they received it.

The group faxed the letter to the California attorney general's office, which was handling the 1991 fraud case. Ronald Smetana, a deputy California attorney general, confirmed his office has a copy of the note.

After mailing the letters, Mr. Hsu boarded Amtrak's train No. 6, the California Zephyr, near Oakland. According to passengers and Amtrak workers, Mr. Hsu locked himself in an economy-class sleeper cabin -- a room about 6 feet, 6 inches by 3 feet, 6 inches.

Travelers became concerned when he failed to emerge the next morning, these people said. Joanne Segale, a retired school-bus driver from Sonora, Calif., who was in the cabin across from Mr. Hsu's, said she knocked on his door and his window during the lunch hour but got no response. Peeking through the curtains, Ms. Segale noticed someone pressed up against the cabin's wall and door who appeared to be bare-chested and huddled in the fetal position, she said.

Ms. Segale summoned Amtrak workers, who eventually used a crowbar to pry the door off its hinges, according to Ms. Segale and another person involved. Mr. Hsu was wedged into a one-foot-wide space between the door and his convertible bed, disoriented and unable to stand due to loss of circulation in at least one of his legs, these people said.

Amtrak conductors and a car attendant freed Mr. Hsu and called ahead for medical assistance. Ms. Segale said that in the cabin "I could see pills on the floor, rolling around -- prescriptions." At Grand Junction, Colo., Mr. Hsu was taken to the hospital. Federal officials arrested Mr. Hsu there later.

Yesterday afternoon, his doctors released him without making a statement on his case, citing privacy laws. About 6:30 p.m. local time he was booked at the Mesa County Jail, the sheriff's office said. He will go before a Mesa County judge this afternoon to hear the charges against him. A separate extradition hearing will follow.