Sen. Hillary Clinton distanced herself Thursday from a leading contributor to her presidential campaign after learning that the donor is a fugitive from the law.
Clinton, appearing at a child care event with New York Gov. Eliot Spitzer, said she was as shocked as anyone to learn that Norman Hsu is wanted in California for not showing up to a 1991 sentencing hearing relating to a grand theft plea deal.
"I wish Mr. Hsu well in dealing with the problems he's confronting," Clinton told reporters. "You're free to check with my campaign about how we vet people, but I think it's fair to say we were all very surprised by this."
Spitzer too came to Clinton's defense, saying she can't be expected to know the courtroom status of each of her donors.
"She has had hundreds of thousands of donors," said the governor, who is facing his own legal questions over campaign financing. "Come on, guys, let's get real."
Hsu, an apparel executive who never contributed any money to political campaigns before 2004, reportedly has raised more than $1 million for Democrats and is listed as one of the top 20 Democratic fundraisers in the country.
He is one of Clinton's "HillRaisers" — people who rustle up at least $100,000 for Clinton's campaign, The Wall Street Journal reports.
Late Wednesday, a Clinton spokesman said the campaign has decided to donate $23,000 identified as coming from Hsu.
"In light of the new information regarding Mr. Hsu's outstanding warrant in California, we will be giving his contributions to charity," spokesman Phil Singer told FOX News.
Among those who have said they will return or donate money contributed or raised by Hsu are Sens. John Kerry, the 2004 Democratic presidential nominee, and Edward Kennedy of Massachusetts; Sens. Barbara Boxer and Dianne Feinstein of California; Al Franken, a Senate candidate in Minnesota; Reps. Michael Honda and Doris Matsui of California; and Rep. Joe Sestak of Pennsylvania.
Sen. Barack Obama's political action committee announced Thursday that it will donate Hsu's $7,000 in contributions to charity. Pennsylvania Gov. Ed Rendell said he would not return or give away $40,000 raised by Hsu.
In 1991, Hsu pleaded guilty to grand theft after raising $1 million in investments for a phony business, Ronald Smetana, who handled the case for the state attorney general, said in an interview with The Los Angeles Times. Bench warrants were issued when he failed to show up to his sentencing hearing.
"He is a fugitive," Smetana said. "Do you know where he is?"
Hsu's lawyer, Lawrence Barcella, said Hsu doesn't remember ever making a deal with authorities, but he does recall a legal case that was part of a settlement with creditors when he went through bankruptcy.
Barcella submitted a statement from his client to FOX News late Wednesday saying he will refrain from raising donations until the matter is resolved.
"I believe I properly resolved all of the legal issues related to my bankruptcy in the early 1990s. Therefore, I was surprised to learn that there appears to be an outstanding warrant — as demonstrated by the fact that I have and do live a public life. I have not sought to evade any of my obligations and certainly not the law," Hsu said. "I would not consciously subject any of the candidates and causes in which I believe to any harm through my actions."
Hsu's "bundles" — donations raised by friends, colleagues and others and stacked together when given to a campaign — are also raising questions. One San Francisco family of six adults who contributed to Hsu's bundles gave $213,000 in donations, including $45,000 to Clinton, the same amount of money the family patriarch, William Paw, earns each year working for the U.S. Postal Service.
"You have a modest house, a family of modest means, making contributions of a size that usually comes from millionaires. Something doesn't add up," said Democratic political strategist Susan Estrich.
Hsu's relationship to the Paw family apparently goes back a decade, and Winkle Paw, 35, is an employee of Hsu's New York companies. Barcella told The Los Angeles Times the Paws have their own cash, and "Norman never reimbursed anyone for their contribution."
Another New York family of three that runs a plastics packaging plant in Pennsylvania and is tied to Hsu donated more than $200,000 in the last three years, the Times states.