-Caveat Lector-
Begin forwarded message:
From: [EMAIL PROTECTED]
Date: September 1, 2007 10:03:34 PM PDT
To: [EMAIL PROTECTED]
Cc: [EMAIL PROTECTED], [EMAIL PROTECTED], [EMAIL PROTECTED]
Subject: Hong Kong Dollars: Demo Campaign Contributor Faces Prison
for $1 Million Rip-off
Big-time Democratic donor
faces prison after surrender
John Wildermuth
San Francisco Chronicle, September 1, 2007
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/09/01/
BADURT6B8.DTL
Redwood City -- Democratic fundraiser Norman Hsu surrendered to San
Mateo County sheriff's deputies in Redwood City on Friday on a 15-
year-old felony warrant, but spent only a few hours in county jail
before being released on $2 million bail.
"We arranged for Mr. Hsu to turn himself in to the court," said Jim
Brosnahan, Hsu's San Francisco attorney. "He's very anxious to get
this behind him."
Hsu was living the good life of a wealthy New York City resident
until this week, when his name turned up in newspaper stories
examining purported abuses in campaign financing. When one of those
stories noted that Hsu was a fugitive wanted in California, his
carefully restructured world came tumbling down.
Hsu, 56, was arrested in connection with a warrant issued in 1992,
when he failed to show up for sentencing after pleading guilty to a
single count of grand theft. The case involved what a prosecutor
described as a Ponzi scheme in which he defrauded investors of more
than $1 million. Prosecutors believed Hsu had fled to his native
Hong Kong.
But for the past few years, Hsu hasn't been living like a fugitive.
Since 2003, he's been a regular on the contributor lists of big-
name Democrats across the nation, crisscrossing the country to
attend parties and fundraisers.
He's given an estimated $600,000 of his own money to candidates
ranging from San Francisco Mayor Gavin Newsom and Assemblywoman
Fiona Ma to presidential hopefuls like New York Sen. Hillary Rodham
Clinton and Illinois Sen. Barack Obama, and helped raise hundreds
of thousands more.
He has hosted high-profile fundraisers in New York and California
and even served on the board of trustees of New York City's New
School university at the request of Bob Kerry, the university's
president and former Democratic senator from Nebraska.
The size and scope of Hsu's contributions made him one of the
party's largest individual contributors. While he gave $23,000 to
Clinton and $7,000 to Obama, he also gave $62,000 to New York Gov.
Eliot Spitzer, $50,000 to New York Attorney General Andrew Cuomo
and $50,000 to the New York State Democratic Party.
His contributions also included $38,000 to the Tennessee Democratic
Party, $750 to Newsom, $1,250 to San Francisco District Attorney
Kamala Harris and $3,500 to the 25th Ward Democratic Organization
in Chicago.
That eagerly sought campaign money now might as well be radioactive
for Democrats, who are racing to distance themselves from Hsu.
Since Hsu's criminal background was revealed earlier this week,
he's resigned from the New School board, and candidates who once
happily took his money are now loudly pledging to give Hsu's
contributions to charity.
The ripples from Hsu's problems are extending farther into the
political universe. The Paw family of Daly City, longtime friends
and business associates of Hsu, have given more than $280,000 to
Democratic candidates and causes since 2004. Many campaigns now are
concerned that Hsu may have been making illegal donations by
funneling his money through the family for the contributions.
Despite denials by attorneys for Hsu, politicians like Ohio Sen.
Sherrod Brown have decided to return any money they received from
the Paws or others associated with Hsu.
The news about Hsu came as a shock to many of the politicians who
had worked with him in recent years.
"I'm surprised, like anyone else who knew him," Clinton told
reporters Friday during an appearance at the New York State Fair.
"I think he's done the right thing in turning himself in and the
process will go forward from there."
That process could end up with Hsu doing time in a California state
prison.
"We pick up now where we left off," said Gareth Lacy, a spokesman
for the California Attorney General's Office, which prosecuted Hsu
in the original case.
That means Hsu is still facing up to three years in prison and a
$10,000 fine, which were part of the 1992 plea agreement.
"We've had good preliminary discussions with the (prosecutors)
about how to resolve this case," Brosnahan said, although he
declined to say when and if a new plea agreement could be reached.
But the first part of those discussions blew up Friday morning when
San Mateo Superior Court Judge James Ellis refused to accept a bail
plan both attorneys had agreed to. Deputy Attorney General Ronald
Smetana asked for $1 million in bail - money that Hsu agreed could
later be used to reimburse victims of his scam - but the judge
balked and ordered bail set at $2 million. When Hsu could not
immediately come up with the money, he was taken from the courtroom
in handcuffs.
It was the first time Hsu has spent time in jail on the charges.
His attorney arrived at the San Mateo County courthouse at around 2
p.m. with the bail money.
Hsu's legal and financial problems, which included a bankruptcy
filing in the early 1990s, found him involved in at least one
eyebrow-raising incident.
In September 1990, Foster City police stopped a car at 3:40 a.m.
for running a red light. Inside the car, they found a Chinatown
gang leader, Hsu and two of his reputed associates. An apparently
frightened Hsu told police he had been kidnapped after being lured
to a San Francisco home.
The three men were arrested for kidnapping, false imprisonment and
battery, although the final disposition of the case was not
immediately available.
Hsu is due back in a Redwood City courtroom Wednesday morning for a
bail reduction hearing. What will happen then is still unknown.
Smetana, who handled the original case, told the Associated Press
that he expects prosecutors to argue for prison time when Hsu
returns for sentencing after the 15-year hiatus.
"He stole $1 million," Smetana said.
E-mail John Wildermuth at [EMAIL PROTECTED]
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