Ex-Fugitive's Fundraising Talent Put Him on Democrats' A-List

By Matthew Mosk and John Solomon
Washington Post Staff Writers
Friday, September 7, 2007

Last week, before his world came crashing down, Norman Hsu helped organize a breakfast meeting in San Francisco with prospective donors. The featured attraction was Democratic National Committee Chairman Howard Dean.

The meeting was hardly unusual for Hsu, a New York apparel manufacturer for much of his career whose success at raising money had propelled him into the upper echelon of Democratic politics.

In the past four years, Hsu raised more than $1.2 million for Democratic causes and candidates, including the DNC and the campaign of New York Gov. Eliot L. Spitzer. And in the past six months, Hsu became a leading fundraiser for Sen. Hillary Rodham Clinton (N.Y.). A person familiar with Clinton's fundraising, who spoke on the condition of anonymity, said Hsu had raised "in the hundreds of thousands of dollars" since January for Clinton's presidential bid.

But his association with Clinton cast an unwanted national spotlight on Hsu, leading to the discovery last week that there was an outstanding warrant for his arrest stemming from a 15-year-old felony theft conviction.

Now, instead of finalizing plans to headline a Sept. 30 Clinton fundraiser in Woodside, Calif., where Quincy Jones is scheduled to perform, Hsu is under arrest, after being captured as a fugitive. FBI agents took him into custody last night at St. Mary's Hospital in Grand Junction, Colo., the Associated Press learned from FBI spokesman Joseph Schadler.

On Wednesday, he failed to appear at a court hearing related to the warrant, forfeiting $2 million in bail. Hsu's attorney James Brosnahan told a San Mateo County judge he did not know where Hsu had gone. The office of California's attorney general said it had not expected Hsu to flee and had not collected his passport.

Another attorney for Hsu, E. Lawrence Barcella Jr., said yesterday the suggestion that Hsu raised money improperly -- including more than $290,000 from one family whose members live in a small bungalow and hold middle-class jobs -- is off base. "I have looked at financial records that clearly show they have the wherewithal to make those contributions," he said.

But Justice Department officials are reviewing the allegations to determine whether an investigation is warranted, according to two federal law enforcement officials who spoke on the condition of anonymity.

For many people who crossed paths with Hsu in politics, his disappearance left them wondering whether they ever really knew him. "I think a lot of us are scratching our heads," said Hassan Nemazee, a Clinton fundraiser in New York.

Facts about Hsu are hard to come by. Twenty-year-old clippings from apparel industry publications say he was born and raised in Hong Kong and arrived in the United States in 1969 to attend the University of California at Berkeley. The computer science major went to the University of Pennsylvania's Wharton School for an MBA. In 1982, with a group of Hong Kong-based partners, he formed Lavano Sportswear.

The business went bankrupt. Describing that time to a Bay Area newspaper, Hsu said he was young and "made a lot of stupid mistakes." But Hsu moved on to form a series of new clothing ventures before going back to Hong Kong, from 1992 to 1996, for unknown reasons. Returning to the United States, Hsu invested in several new wholesale apparel and import ventures that collectively generate about $2 million a year, according to Dun & Bradstreet estimates.

Hsu's first appearance on the political scene came in September 2003, when a Los Angeles area physician, Stanley Toy, introduced him to a major Democratic fundraiser who at the time was collecting money for Sen. John F. Kerry's presidential campaign.

Hsu made a $2,000 donation, the maximum allowed, and the Kerry fundraiser, who spoke on the condition of anonymity, said it was after that introduction that Hsu began not only donating but also raising money for Kerry. Toy did not return calls seeking comment yesterday.

Once Hsu made that first imprint as a big donor, other campaigns quickly came knocking. Campaign finance records show which candidates -- including those running for Los Angeles city attorney, California comptroller, Ohio secretary of state and Massachusetts treasurer -- sought and received his financial help. Starting in 2004, he gave to an array of federal candidates, including the Senate campaigns of Barack Obama (D-Ill.) and Clinton.

Nemazee, who was helping head the Kerry fundraising effort in New York when he met Hsu, said Hsu's attraction from a fundraising perspective was that he delivered and did so consistently.

When 2008 presidential candidates began recruiting donors, several reached out to Hsu. But in an interview with The Washington Post in July, Hsu said he had no doubts where he would land. "I committed myself [to Clinton] way before she announced," he said. "No caution at all. I told her I would support her."

The Clinton campaign stood by Hsu until the Los Angeles Times reported his outstanding arrest warrant. At that point, the campaign reversed course, announcing it would donate to charity the $23,000 in direct contributions Hsu made to Clinton's presidential campaign, her Senate reelection bid and her political action committee. The campaign does not plan to return any money Hsu raised from other donors.

Political researcher Alice Crites contributed to this report.

© 2007 The Washington Post Company