Will Hillary Go Down in Corruption Scandals?

September 17, 2007

The strange story of Democratic fat cat donor Norman Hsu is rich and revealing, but it certainly isn't the only controversy that puts the lie to the Democratic claim to have ended the culture of corruption. Other embarrassing developments include the fine assessed to Americans Coming Together, the group backed by Democratic donor George Soros; the New Jersey corruption scandal that has cast a wide net over state Democrats; and Democratic Senator Hillary Clinton's legal troubles with former donor Peter Paul.

The New York papers, even the Times, are giving the Hsu story significant coverage, since it involves a home-state senator. But the scandal is getting very little TV coverage, and the other stories even less.

By one count, each of the big three broadcast networks did one in depth story about the strange case of Hsu, and one follow-up. But nothing is being done so far in the major media to suggest this is a scandal that reflects badly on the Clintons.

This could easily change, however, as the powerful New York Times could decide that the latest scandal is an indication that Senator Clinton carries too much baggage to be a viable Democratic presidential candidate.

The Hsu story began only a couple of weeks ago when the Wall Street Journal exposed the more than $1 million that this "businessman" had donated to or bundled for Democratic candidates, with the largest amount going to Hillary Clinton's campaign. There is strong evidence suggesting that Hsu has been making donations through other people, such as the Paw family in the San Francisco area, in which the head of the household, who earned about $50,000 a year as a postman, and other members of his family, gave more than $200,000 to Democratic candidates and organizations. The house that is listed as their residence used to be owned by Hsu.

Hillary's campaign tried to make the story go away by stating its intentions to give to charity the $23,000 that Hsu had personally contributed to her campaign. It says it is now planning to give back all $850,000 that Hsu, who also served as a board member of former President Clinton's Clinton Global Initiative, had solicited for her campaign. The Washington Post reported that "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 Post article called the refunds "among the largest in political history," and went on to cite then-President Bill Clinton's refunds of about a million dollars for 1996 donations from various illegal sources. According to a CNN article and other media sources, the Democratic National Committee (DNC), closely controlled by Clinton allies, actually returned about $3 million in questionable contributions from non-U.S. citizens and businesses. This would probably be the largest refund in political history.

The Hsu case has brought up memories of corrupt practices that the Clintons hoped had been buried. A short list includes Clinton Vice President Al Gore's fundraising calls from the White House, his "fundraiser" from Buddhist Monks at the Hsi Lai Temple, and campaign contributions from such figures as Johnny Chung, John Huang, and Charlie Trie. R. Emmett Tyrrell did an excellent job recalling those days in a recent column that ran in Human Events.

It turns out that Hsu has a very shady past. In a list compiled by the Wall Street Journal of his donations, it shows how active he was, and raises serious questions about how he went about using others to funnel donations to Clinton, Barack Obama, John Kerry in 2004, and many others. He was, based on many reports from the San Francisco Chronicle, the Journal, and the New York Times, a con man and a criminal. No other terms really do him justice. The Times story tells of one of his business ventures, "Components Ltd., a company controlled by Mr. Hsu that has no obvious business purpose and appears to exist only on paper, has paid a total of more than $100,000 to at least nine people who made campaign contributions to Mrs. Clinton and others through Mr. Hsu."

In California he had swindled many people out of millions of dollars in a phony latex glove business that state officials described as a Ponzi scheme. According to the Los Angeles Times, "fundraising experts from both parties pointed to warning signs that should have given aides pause." The most obvious red flag, they said, was "A check of a commonly used database" that showed he had been kidnapped by gang members and had declared bankruptcy in 1990.

After the Journal brought his name to light, California realized it had an outstanding warrant on him, and he had pled guilty and agreed to do some jail time. But instead he went on the lam to Hong Kong and the Philippines, before returning to the U.S. One question that hasn't been addressed was how he got back into the U.S. Why didn't his passport set off a red light as he went through customs? The Journal has done a story pointing out that there are probably two million fugitives with warrants out in this country, many with much smaller crimes. But this case has shined a light on this "loophole" in our justice system.

Hillary and her cronies have expressed shock at this behavior. After all, why should they be expected to know what Hsu was like? Did anyone in the media blame the Republicans who took money from Jack Abramoff? Or just Abramoff himself? Of course they also blamed the recipients. Clearly the Republicans have had their own corruption problems, with Abramoff, Representatives Duke Cunningham and Bob Ney, and other embarrassments such as Sen. Larry Craig. But the difference is in the media coverage, both in degree and intensity, and how directly the media hold each side responsible. Republicans get much tougher scrutiny and coverage.

Bill Clinton has been on TV everywhere since this Hsu scandal erupted, selling his latest book called Giving. He does not get grilled. To the contrary, the media treat him and Hillary with total deference, as if they are victims in the scandal.

What bears watching is the New York Times having run a couple of hard-hitting stories about the Clinton-Hsu scandal. Could the liberal paper be signaling that Senator Clinton is cooked and that Senator Barack Obama looks like the better Democratic presidential nominee?

Political corruption is not going away. But this series of scandals implicates Democrats on the state and federal levels. That is why we are likely to see media interest wane.

The wildcard is the New York Times, which could decide that Hillary is just too corrupt to be elected.

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Copyright ©2007 Roger Aronoff

Roger Aronoff is the Editor of Accuracy in Media, and a member of the Citizens’ Commission on Benghazi. He can be contacted at roger.aronoff@aim.org.