LAWFUEL – The Legal Newswire – A Washington Post editorial outlines the pitfalls around presidential candidates like Hillary Clinton, who fall foul of poor laws relating to campaign donors like Norman Hsu. The editorial:
Norman Hsu may turn out to be the best thing that’s happened to campaign finance reform in years. The Hsu episode illuminates how the current system produces bad results and why changes need to be made.
Mr. Hsu is a Democratic fundraiser who collected $850,000 for Hillary Rodham Clinton’s campaign and hundreds of thousands more for other Democrats. He is also, it turns out, a crook: He pleaded no contest to grand theft in an investment fraud scheme and failed to turn up for sentencing in 1992.
The FBI is investigating whether Mr. Hsu, who tried again to flee last week when his fugitive status was revealed, was engaging in similarly shady investment activities even as he became one of Ms. Clinton’s biggest financial backers. The Clinton campaign, after initially returning Mr. Hsu’s $23,000 in direct donations but saying it saw no reason to return the contributions he solicited, plans to toss back the entire bundle now that it has become a political hot potato.
The first lesson of the Hsu episode is one that all candidates — especially candidates named Clinton — ought to have learned after the fundraising scandals of the 1996 presidential campaign: Beware of fundraisers bearing big bundles.
To some extent, all candidates are at the mercy of their financiers, taking it on faith that the contributions being solicited are not the product of under-the-table, and illegal, reimbursement schemes. But the bigger the bundle, the more diligence is due in checking out the bundler, especially one like Mr. Hsu, whose source of wealth was not obvious, and whose listed occupation changed from one filing with the Federal Election Commission to another