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Who Is Norman Hsu?


From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.


And I'm Michele Norris.

And almost every day, we're learning more about the mysterious Democratic fundraiser, Norman Hsu. Until two weeks ago, Hsu was one of Hillary Clinton's most prodigious fundraisers. But since then, he's run from the law, threatened suicide and forced the campaign to return hundreds of thousands of dollars in contributions. He's currently being held in Colorado. He's expected to return to California for his sentencing on a 15-year-old grand theft charge.

NPR's Peter Overby has been examining Hsu's political connections, while Scott Horsley has been studying his business record. Together, they have filed this report. We'll start with Peter.

PETER OVERBY: Like many of the best money raisers, Norman Hsu came from the world of business - soft-spoken but eager, so eager to please. John Catsimatidis is a businessman and Democratic fundraiser in New York City. He remembers when Hsu appeared during the 2004 John Kerry campaign.

Mr. JOHN CATSIMATIDIS (Businessman and Democratic Fundraiser): He just showed up one day, and about a couple of years ago. And he seemed like a very pleasant guy. And he was very well dressed. And nobody thought anything of it.

OVERBY: They're thinking about it now. But as Hsu built a golden reputation as a political moneyman, his back-story lay hidden.

SCOTT HORSLEY: On paper, Norman Hsu has some impressive credentials. Born in Hong Kong, educated at Berkeley and the Wharton School, in the 1980s, he was featured in the business press as a successful fashion entrepreneur. But Hsu also has a more ominous paper trail, lawsuits filed by disgruntled investors, a bankruptcy and a criminal record for grand theft.

Orthodontist Britta Tomer is a one-time investor who soured on Hsu. In the 1980s, she and her partner, David Chien(ph), helped bankroll one of his California ventures.

Ms. BRITTA TOMER (Orthodontist): It sounded, in a way, good. I was a little bit suspicious about it, but we did invest, both him and I. We did invest $20,000 each. That I remember.

HORSLEY: Tomer says she quickly got cold feet and demanded her money back, but she says her partner's investment was lost. The pair sued in 1988, alleging fraud. Within two years, Hsu had filed for bankruptcy. Authorities say at least one of Hsu's California businesses was an illegal Ponzi scheme. He reportedly raised more than $1 million from investors for the purpose of buying and reselling latex gloves.

Although some early investors did make money, authorities say there's no evidence any gloves were actually bought or sold. The latex scheme led to a grand theft charge 15 years ago to which Hsu pleaded no contest. But before he could be sentenced, he disappeared. Since then, Hsu traveled to Hong Kong and back to the U.S., keeping a relatively low profile, until he began making a name for himself as a big political contributor.

OVERBY: Since 2003, Norman Hsu made personal contributions to 27 congressional Democrats and seven party committees. More than 40 percent of his contributions came this year. He also gave to charities, the Innocence Project, which reexamines death-penalty cases, and the Clinton Global Initiative. He contributed and got on the board of The New School, a university in Manhattan. As for raising money from others, the practice known as bundling, that information isn't normally disclosed. The Clinton campaign says Hsu was one of their very top bundlers, HillRaisers, the campaign calls them.

John Catsimatidis says a bundler starts by pledging to raise a certain amount for the candidate.

Mr. CATSIMATIDIS: And, you know, a person is expected to hold up to their word.

OVERBY: How often do they actually hold up to their word?

Mr. CATSIMATIDIS: I would say 50 percent.

OVERBY: Okay. What do you think his average was? Do you have any idea?

Mr. CATSIMATIDIS: I think his average is close to 100. That's why everybody liked him.

OVERBY: A bundler needs to have persuasion and persistence. Norman Hsu had both. His bundling totals are estimated to run more than $1 million - perhaps 70 percent of it for Hillary Clinton. Now, Democrats wonder how he did that. They also wonder why. They remember hearing him say that he loves Democrats, loves the Democratic Party.

But John Catsimatidis says that unlike most bundlers, Hsu never seemed to expect anything in return. He didn't care about issues. And he never talked about his business.

Mr. CATSIMATIDIS: Very little. I asked him, once or twice, and he said he was in, you know, the schmatte business.

HORSLEY: That's Yiddish for the garment business. By the beginning of this decade, Hsu had established himself in the role of a New York City garment executive. A woman named Yau Cheng began investing with Hsu in 2001, according to her lawyer. And those early investments were successful.

Over the next six years, she and a partner recruited other investors, ultimately raising tens of millions of dollars. They were told their money was being used to finance Chinese apparel companies manufacturing goods for high-end retailers, including Gucci and Prada. As with the earlier latex venture, though, there are holes in this story. For one thing, Gucci and Prada say they've never done business with Hsu or his company, Components Ltd.

The investors began to get nervous when Hsu's old legal troubles resurfaced, and especially after he failed to show up for a court hearing in California last week, forfeiting $2 million bail. Days later, when investors tried to cash some of Hsu's checks, they were told the account had insufficient funds.

On the run once again, Hsu reportedly sent a suicide note to several associates last week, then boarded an Amtrak train bound from California to Chicago. He stayed locked in his room so long, fellow passenger Joanne Segale began to worry about him.

JOANNE SEGALE (Train Passenger): His room, when the train would shift, the curtains would go in five or six inches. And I could see somebody on the floor, wedged.

HORSLEY: Segale ultimately called train personnel for assistance. And Hsu was held off the train in Grand Junction, Colorado, where he's now back in custody. Segale says train workers found a bottle of prescription drugs and pills scattered around his cabin. Investors, meanwhile, have asked the New York District Attorney's Office to investigate the garment scheme. Their lawyer won't say whether investors were swayed by Hsu's political contributions, but at least four people connected with the investors' group made maximum contributions to Hillary Clinton's campaign on the same day, March 28th.

OVERBY: But by this spring, Norman Hsu's world was on the brink. Questions were surfacing about his business practices. In August, more questions about his fundraising and about the 1992 bench warrant. Democrats quickly dumped his personal contributions. Barack Obama sent $7,000 to charity, Hillary Clinton, $23,000. And now, Clinton is doing what no presidential candidate has done before - giving back all of the $850,000 that Hsu had raised from 260 donors. On Wednesday, in a conference call with reporters, Clinton acknowledged the blow to her presidential bid. This audio comes from DiversityInc magazine.

Senator HILLARY RODHAM CLINTON (Democrat, New York): It was very difficult for us to make any decision other than returning the contributions that were in any way connected to him. And that's what we decided to do.

OVERBY: The suspicion, which the FBI is looking into, is that Hsu or someone else illegally gave money to some of the donors to cover the contributions. The campaign hopes that many of the other donors will decide to recontribute.

This is Peter Overby.

HORSLEY: And I'm Scott Horsley, NPR News. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.
Peter Overby has covered Washington power, money, and influence since a foresighted NPR editor created the beat in 1994.
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