Norman Yung Yuen Hsu^[1] (born 1950 or 1951^[2]) is an American businessman in the apparel industry and a major donor to the Democratic Party and Democratic causes.^[3] He has personally given over $250,000 to the Democratic Party during recent election cycles,^[4] and over $600,000 to federal, state, and municipal candidates since 2004.^[5] In addition he has acted as a "bundler", someone who gathers contributions from other individuals within an organization or community and presents them to a campaign.^[6] He is a major fund raiser for the Presidential campaign of New York Senator Hillary Rodham Clinton, having earned the title of "HillRaiser" by raising over $100,000 for her campaign.^[7] Hsu became notable after investigations that revealed potential campaign finance irregularities, as well as being a long-time fugitive despite having a prominent role in political activities.

Biography

Hsu was born and raised in Hong Kong.^[8] He came to the United States at the age of 18, studying computer science at the University of California, Berkeley and later receiving an M.B.A. from the Wharton School.^[8] He and other Hong Kong partners formed the sportswear company Laveno in 1982, which went bankrupt in 1984.^[8] He then created other sportswear companies, including Wear This, Base, and Foreign Exchange.^[8] During this time, he became a naturalized American citizen.^[5]

Starting in 1989, Hsu raised $1 million from investors to launch a latex glove business. In 1990, Hsu, then living in Foster City, California, declared a bankruptcy.^[2] In 1991, California authorities brought fraud charges against him, describing his operation as a Ponzi scheme. Specifically, authorities claimed Hsu had not engaged in any legitimate business activity, but instead was using funds from later investors to pay returns to earlier ones.^[8] In February 1992 Hsu plead no contest to one count of grand theft and agreed to serve up to three years in prison and pay a $10,000 fine.^[9] Hsu subsequently failed to appear at the sentencing hearing and a warrant was issued for his arrest.^[10]

Hsu fled to Hong Kong and lived there from 1992 to 1996 while working in the garment industry.^[8][5][9] Hsu then moved to California, and became an investor in Silicon Valley.^[9] He later relocated to New York, where he once again became involved in the apparel business.^[5] Starting in 2003, Hsu began contributing to, and collecting contributions for, the Democratic Party.^[8][5] He also became a trustee of The New School in New York, to whom he donated $100,000 and provided the money for a scholarship.^[11] By 2007, his status within the Clinton campaign had risen to the level where in September, he was scheduled to co-host a major gala fundraising event featuring music legend Quincy Jones.^[8]

Controversy regarding political donations

Relationship with Paw family

In August 2007, an investigation by The Wall Street Journal revealed potential campaign finance irregularities involving Hsu, in his role as a "bundler", and his long-time associates, the Paw family of Daly City, California. Specifically, members of the Paw family made donations of over $200,000 to Democratic candidates since 2005. These donation closely tracked those of Hsu in terms of timing, amounts and donees. In addition, the donations appeared to be much larger than would be expected given the Paw's modest income. According to records obtained for the investigation, the Paws own a gift shop and live in a 1,280-square-foot house that they recently refinanced for $270,000. William Paw, the 64-year-old head of the household, is a mail carrier with the U.S. Postal Service and earns approximately $49,000 a year.^[3] Other records linked Hsu to the Paws, including a campaign finance filing in which Hsu lists the Paw's home as his residence.

In September 2007, it was reported that the U.S. Justice Department has launched a formal investigation into possible campaign finance violations by Hsu and his associates. One focal point for the investigation concerns whether any of the donations by the Paws were reimbursed by Hsu, which would constitute a felony. Through his attorney, Hsu has denied any wrong-doing.^[12]

Status as fugitive

One day after the release of The Wall Street Journal's investigation, The Los Angeles Times reported that the warrant issued after Hsu's failure to appear for sentencing for his 1992 fraud conviction was still valid.^[7] On August 31, 2007, Hsu surrendered to authorities at the district court house in Redwood City, California. ^[13] The California Attorney General's office had negotiated $1 million bail to be eventually applied to restitution, but San Mateo County Superior Court Judge H. James Ellis ordered bail set at $2 million. ^[14] Hsu was jailed briefly that day until his attorney returned with the increased bail.

It was unclear how Hsu could have remained at large for 15 years and engage in prominent political activity without being detected. James Broshahan, Hsu's laywer in California, stated that Hsu's prominence showed that he did not behave like a fugitive but rather that he "has been leading a life of exemplary conduct for the past 15 years," and that Hsu was moving towards a resolution of the matter, including a plan of restitution for victims of Hsu's actions.^[11] Hsu also resigned his New School trustee position.^[11]

On September 5, 2007 a judge issued a new warrant for his arrest after he failed to appear for a bail hearing. Hsu forfeits the $2 million bail he posted last week. Hsu's lawyer said he doesn't know where his client is. [1]

Source of income

The source of Hsu's income is unclear. While he claims to be involved in several businesses in the fashion industry, visits to those addresses "found no trace of Mr. Hsu."^[5] At several business addresses provided on Hsu's campaign donation forms, none of the listed businesses could be located.^[5] A New Jersey fashion designer that Hsu had listed as a co-investor, said he had never heard of Hsu.^[11] Lawrence Barcella, Hsu's Washington, D.C. attorney, claims that Hsu's post-1996-return Silicon Valley investments account for some of his ability to make his political contributions.^[9]

Defense

Barcella was quoted in Journal article as saying, "You are barking up the wrong tree. There is no factual support for this story and if Mr. Hsu's name was Smith or Jones, I don't believe it would be a story."^[3] His comments seemed to refer to Hsu's racial background and the possible similarities to the 1996 controversy wherein it was alleged that agents of the People's Republic of China sought to illegally influence the 1996 United States presidential election through donations to the re-election campaign of President Bill Clinton, the husband of Senator Clinton.

The progressive media watchdog group Media Matters for America reported that approximately half of the $200,000 that the Journal said the Paws donated since 2005 came from the Paws' 35-year-old son Winkle Paw^[15] who was recently hired by Hsu to work at several of Hsu's New York companies^[16]. Media Matters also reported on a written statement by Barcella on behalf of Hsu and Winkle Paw in which he again dismissed the article as "untrue" and specifically called the article's characterization of his comments on Hsu's race "disengenuous". Barcella also said that he offered to provide the Journal with the Paws' private financial information which he said proved they had the financial wherewithal to donate the money they did, in contrast to the article's implication that the Paws were too poor to do so. Barcella said that this offer was meant to be in exchange for the Journal not printing the article, but that the Journal declined the offer.^[17]

Connection with Organized Crime

Hsu was briefly connected with Triad society leader Raymond Chow ^[18] (aka Kwok Cheung Chow, Kwok Chung Chow, "Shrimp Boy") when Foster City Police stopped a car at 3:40 am one morning in 1990. Four individuals were in the car, and one of them was Hsu who complained that he was being kidnapped. One of the alleged abductors was Raymond Chow who was then 30 years old and whose name was reported as Kwok Chung Chow. Hsu's girlfriend at the time said he had cigarette burns on his arm. Hsu's lawyers later stated that the incident involved debt collection. Police officials in the Bay Area have not been able to retrieve case records, and Chow and one of the other alleged abductors declined to comment when reached by phone by a Los Angeles Times reporter.^[9]

Reaction

The Associated Press reported on August 29 that "Democratic presidential candidate Hillary Rodham Clinton will give to charity the $23,000 in donations she has received from a fundraiser who is wanted in California for failing to appear for sentencing on a 1991 grand theft charge."^[19] Clinton campaign spokesman Phil Singer said the campaign did not plan to return any money Hsu raised from other donors. Other Democrats such as Al Franken, a Senate candidate in Minnesota, Representattives Michael Honda and Doris Matsui of California, and Representative Joe Sestak of Pennsylvania, all said they would divest their campaigns of Hsu's donations,^[19] as would Eliot Spitzer's and Andrew Cuomo's completed 2006 New York State campaigns,^[5] as would Clinton rival Barack Obama, whose 2008 presidential campaign received $7,000 from Hsu.^[5]

References