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Correction to This Article
The Page One article incorrectly described Terence R. McAuliffe as the finance chairman of Sen. Hillary Rodham Clinton's presidential campaign. He is the campaign chairman.

Clinton's Campaign To Return $850,000

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By John Solomon and Anne E. Kornblut
Washington Post Staff Writers
Tuesday, September 11, 2007

Sen. Hillary Rodham Clinton announced last night that she will return $850,000 in campaign donations solicited by Norman Hsu, severing ties with a top fundraiser who was jailed last week after attempting to flee from criminal charges in California.

The refunds, among the largest in political history, come after weeks of reports about Hsu's controversial history and murky business practices. Clinton officials said that the senator, acting out of "an abundance of caution," had directed the campaign to return donations from about 260 contributors tied to Hsu because of his apparent involvement in an illegal investment scheme.

The campaign would not identify the donors involved.

Aides also said the campaign will begin conducting criminal background checks on big fundraisers to prevent a similar incident from occurring in the future.

Hsu was wanted on a 15-year-old warrant issued in California; after turning himself in to authorities last week, he did not appear at a hearing and later fell ill on a train ride through Colorado, where he was taken into custody.

The Hsu scandal has brought unwelcome reminders for Clinton of her husband's fundraising controversies in the 1990s, including an episode involving a Little Rock businessman named Charlie Trie. The Clinton legal fund returned or refused to accept at least $640,000 from Trie after allegations that he funneled phony donations from contributors who could not afford to write big checks.

Also in the 1990s, the Democratic National Committee returned more than $360,000 in donations from Taiwanese American businessman Johnny Chung, who raised money for the party during Bill Clinton's 1996 reelection bid and later admitted that he accepted some of the money from Chinese military officials.

Hillary Clinton's campaign decided more than a week ago to return $23,000 that Hsu had personally donated to her various campaigns.

"Mr. Hsu donated to numerous charities and more than two dozen candidates and committees," Clinton spokesman Howard Wolfson said. "Despite conducting a thorough review of public records, our campaign, like others, was unaware of Mr. Hsu's decade-plus-old warrant.

"To help ensure against this type of situation in the future, our campaign will also institute vigorous additional vetting procedures on our bundlers, including criminal background checks," Wolfson added. "In any instances where a source of a bundler's income is in question, the campaign will take affirmative steps to verify its origin."

Clinton "simply didn't want to have to keep answering questions about a bundler whose background is now clearly in question," a senior adviser said, speaking on the condition of anonymity.

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