Clinton Campaign Cites Flawed Background Check

Norman Hsu, a
Norman Hsu, a "bundler" for Hillary Clinton's presidential campaign, raised $850,000 for the senator this year. (By Paul Sakuma -- Associated Press)
By John Solomon, Matthew Mosk and Anne E. Kornblut
Washington Post Staff Writers
Wednesday, September 12, 2007

A spokesman for Sen. Hillary Rodham Clinton's presidential campaign yesterday blamed a faulty background check for the campaign's failure to raise any questions about Norman Hsu, a previously unknown businessman who suddenly became one of its biggest fundraisers.

Though a commonly used public record search shows that Hsu had multiple business lawsuits filed against him dating to 1985, filed for bankruptcy in 1990, and was a defendant in two 1991 California court matters listed as possible criminal cases, the campaign said its computer checks used insufficient search terms that did not include the two middle names Hsu used in the California case. "In all of these searches, the campaign used the name Norman Hsu, which, like the search results of other committees and campaigns, did not turn up disqualifying information," Clinton spokesman Howard Wolfson explained.

Now, the FBI is conducting preliminary inquiries into allegations it has received about Hsu's fundraising and business dealings, according to a senior law enforcement official, who added that none has reached a point of warranting the opening of a formal investigation.

Hsu's troubled past eluded the Clinton campaign's detection even though he was a well-known figure who frequently appeared at campaign events and was one of the top 15 fundraisers for Clinton's 2008 presidential bid. He raised $850,000 in just eight months, more than most such "bundlers" connected to any candidate, without raising red flags.

Clinton campaign chairman Terence R. McAuliffe -- famous for his careful, methodical courting of big donors and fundraisers -- said in an interview yesterday that he does not know where Hsu came from. "I don't know how he became involved in the Clinton campaign," McAuliffe said. "I've never asked the man for a check."

Hsu twice attended events sponsored by Bill Clinton's global charitable effort, putting up $15,000 each time as an entrance fee. The donations allowed him to mingle with the corporate executives typically attracted by the former president's charitable endeavors.

Bill Clinton's aides said they knew little about Hsu's own businesses, save that he was involved somehow in the apparel business. Shortly after questions arose in late August about Hsu's background, the Clinton Global Initiative refunded the $30,000 -- more than a week before Hillary Clinton's campaign decided to refund the $850,000 that Hsu had raised.

The Clinton campaign has promised that future fundraisers will undergo criminal background checks. But many questions remain about the events leading to the donations.

That such a basic mistake could slip through the famously disciplined Clinton campaign has raised eyebrows among strategists in both parties. Clinton herself is known for doing background research on people before she meets them, digging for personal details she can introduce into a conversation. The sheer amount Hsu raised as a virtual unknown in a short period of time should have raised questions, some say.

"He is a bundler on steroids," said veteran Republican campaign lawyer Jan W. Baran. "Just think back to the 2004 campaigns: The highest level of bundler recognition was $250,000, and that was at the end of the campaign. Here we are in September of '07, and this guy has apparently raised $850,000 in a matter of months. And for that same reason, he probably should have set off alarm bells."

Hsu was unknown in political circles until late 2003, when he wrote his first political check to then-presidential candidate John F. Kerry. He was not anonymous for long. As the amounts he raised for Democrats across the country approached $1 million, Hsu's reputation as a source of political money soared.

"Norman's name was a name floating out there as someone who could deliver big-time," said a Democratic fundraising consultant, who spoke on the condition of anonymity because of the sensitive nature of the Hsu case. Hsu was based in New York, making it natural for Clinton's Senate finance team to gravitate toward him, the consultant said.

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