Has the WSJ tracked down Hsu’s cash? Update: Was Hillary warned? Update: Hillary wants refunded donations to be re-donated

posted at 1:44 am on September 12, 2007 by see-dubya
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The Wall Street Journal reporters who’ve been dogging the Paw family and Norman Hsu may have uncovered another piece of the puzzle:

New documents reviewed by The Wall Street Journal may help point to an answer: A company controlled by Mr. Hsu recently received $40 million from a Madison Avenue investment fund run by Joel Rosenman, who was one of the creators of the Woodstock rock festival in 1969. That money, Mr. Rosenman told investors this week, is missing.

Mr. Rosenman is apparently a very successful capitalist, and it’s probably not for me to quibble with his methods but, before I signed over a FORTY MILLION DOLLAR LOAN to someone, I’d want to do a little background check…just to see if there are any red flags like, oh, an outstanding fugitive warrant, or a grand theft conviction for a million-dollar Ponzi scheme in another China-import deal.

In a letter this Monday, Mr. Rosenman told investors that the 37 outstanding deals with Components Ltd. are set to mature “over the next four months.” But he indicated that was not likely. He said he had deposited two checks from Components that “matured Sept. 7.” He was informed by the banks that there were insufficient funds.

“This development, coupled with recent revelations,” he wrote, “led us to believe that payments due on our recent transactions with Components and Hsu may not be made.”

Source Financing, Mr. Rosenman’s company, has asked the beneficiaries of Mr. Hsu’s largesse to quit giving it away to charity in order to recover it for their investors.

No word on whether Mr. Rosenman wants his own contributions to Hillary back, nor those of a Ned Rosenman who also works for Source Financing, nor those of a Molly Rosenman, also of Source Financing–each of whom gave her $4600 back in March.

Exit Questions: What sort of contacts did Hsu have in China that he thought he could pull this off so profitably? Did Hsu even think this would work? Or was the whole thing another con? That doesn’t seem likely, because this would blow up in Hsu’s face later instead of sooner (although maybe he planned to move the money offshore and then vanish before the post-dated checks came due).

And if it was just a con, why raise his profile by donating all that money to the Democrats?

PS Bonus Joel Rosenman quote from 1969, after he produced Woodstock:

“Those of us who have worked on this thing have learned an awful lot about each other. You can learn a lot about human nature when the chips are down.”

MORE: Like (apparently everyone) at Source Financing, Mr. Rosenman’s partner Yau Cheng was a longtime Hillary backer and gave her $4600 on 3/28. (I’m wondering whether their checks were in one of the “bundles” that Hsu took to Hill HQ.)

AND MORE: The Rosenmans and the Clintons go waaayyy back. Pittsburgh Post-Gazette, July 28, 1994:

It looks like first daughter Chelsea Clinton is taking a pass on attending Woodstock ‘94. Molly Rosenman, the daughter of Woodstock producer Joel Rosenman, issued an invitation to Chelsea for the Aug. 12-14 event in New York State.
”Dear Chelsea,” the letter reads, ”If you like rock & roll, this should be great! Why don’t you join my family and me at Woodstock? Best Wishes, Molly.”

White House spokeswoman Dee Dee Myers said, ”As far as I know, I’ve seen no plans to that effect.” The 25th anniversary show will feature such performers as Bob Dylan and the Spin Doctors.

Update (AP): How much did Hillary know about Hsu? Her camp’s apologized for not vetting him more thoroughly, but that conveniently places them behind the veil of ignorance. MM wonders how that can be possible when Hsu, as a fugitive, would have turned up in a Secret Service background check before being allowed in contact with the Clintons. WaPo’s skeptical too:

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.”…

Irvine, Calif., businessman Jack Cassidy told the FBI that he sent at least three e-mails to a Clinton campaign official on the West Coast this summer, specifically raising concerns that Hsu was engaged in a risky investment scheme and was using Hillary Clinton’s name “in vain” to solicit people for his business proposition, according to a person directly familiar with the matter.

Cassidy’s concern was that Hsu was using the Clintons to give credence to his business venture, the source said, speaking only on the condition of anonymity because of the ongoing FBI inquiry.

According to a source for the New York Daily News, “They knew [about Hsu], and they knew back in June.” Yeah, well, they know about this guy too and that hasn’t not stopped them from working with him.

Update (AP): Just how many tainted donors does Hillary have, anyway?

Update (AP): You cannot be serious.

The campaign is refunding $850,000 to [Hsu's bundled] donors, viewing the money as tainted. Yet the campaign is also risking another public relations mess by saying that it would take back the money if it clearly came from the donor’s bank account, not from Mr. Hsu or another source. The risk is that Mrs. Clinton will appear to want more cash no matter whether it was once colored by a disgraced donor.

The campaign will try to get most of the donors to give the money back right after the refunds, said a senior Democratic strategist who advises Mrs. Clinton’s campaign. “That’s the plan,” the strategist said.

The strategist, who spoke on condition of anonymity to discuss internal campaign deliberations, added that the Clinton campaign was deeply worried that the controversy could grow.

“They are worried there are more out there,” the strategist said. “Bundlers. The feeling is there are a few more that will have Hsu problems.”

Riddle me this: If the worry is that Hsu was using at least some of these people as fronts so that he could exceed the federal limits on how much he could donate to Hillary, then how will the money be any less tainted if they re-gift it to her? I.e., if Hsu cuts John Doe a check for $100,000 and asks him to spread it around among Democrats A-Z, then giving that money back to John so that he can give it right back to you doesn’t “cleanse” it. It’s Hsu’s money; John never should have had it in the first place. If you donate the money to charity and then hit John up for a donation from his own bank account, that’s fine. But that ain’t what she’s planning to do. Exit question: Why not at least wait until the DOJ investigation of Hsu’s bundled donations is over so you know which donors are clean and which aren’t?

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